After living in MN for 25 years, my wife and I decided to visit Duluth for the first time. We were informed by numerous friends to find a hotel by the Canal Park area, otherwise our experience wouldn't be the same. We were fortunate to find a vacant room just one week prior to visiting (it was during the busy summer season). Initially, the cost was a bit higher than i'd preferred ($285/evening) vs ~$150-$200/evening for hotels that were located more inland. However, after staying here, we're so glad we choose this location, as everything was within walking distance from here. Additionally, on-site parking (one space / room), Wifi internet and hot breakfast were complimentary. There are numerous stores and restuarants nearby and the light-house and lift bridge were just a few minutes walk. The boardwalk (canal walkway) was literally behind the hotel and the lakeview from the room was fantastic.
My only (minor) complaint was the location of our room, as it was next to the public bathrooms and entrance to the pool area. It was a heavily trafficed area and was quite noisy (our door failed to dampen the noise from the hallway). Since the pool area was open for kids until 10 or 11pm, it remained noisy well into the evening. I would highly recomend to request rooms that are either on the 2 or 3rd floors, or if you have to be on the 1st floor, request a room as far away from the pool area.
Lastly, I want to praise the hotel staff for their professionalism and hospitality. From the gentleman who greeted us in the parking lot, to the front desk receptionist and breakfast staff, everyone had a smile on their face and was so polite. Keep up the good work!!