Duluth is the third largest city in Minnesota so you have a great choice of accomodation in this area.
Check out the
Duluth Hotel section of the site. The Inn on the Lake sounds perfect to me as you will enjoy beautiful views and great aminities but i guess it depends on your budget, which you havent mentioned.
While your staying here you will have plenty to keep you busy. You can go on a sight seeing cruise, visit Canal Park where you can eat and shop, go to the great lakes aquarium or spend a day in the Lake Superior Zoo.