Of the 3 DLR hotels, "nicest" and "has the Disney magic" may be two different things. I am one of those stay on-site sorts of people. I have never been to WDW, but I love staying onsite at DLR because I love to be immersed in full Disney mode from beginning to end, and staying at one of the hotels is all part of the experience for me. However, lots of folks on the DIS swear by the off-site hotels because of their convenient location and much lower prices. People seem to love HoJo's a lot and sometimes you can get a great Entertainment Rate there.
So back to the 3 DLR hotels...the nicest one (considered the luxury hotel) is probably the Grand Californian. It is reminiscent of sort of an elegant mountain chalet, with dark wood and dim lighting, comfy couches and chairs in the lobby, a piano player, grandfather clock in the lobby, high ceilings and a fireplace. But it does not have a lot of obvious Disney touches. The Hidden Mickeys are hard to find and it is just not oozing in that Disney feeling. BUT, that said, the location is part of the lofty price one pays to stay at the GCH, because it is
so convenient to the entrances of both DL and DCA - in fact, it has its own private entrance to DCA that any guests of the 3 hotels can use.
The
Disneyland Hotel is probably what you would want for the Disney magic. Although many folks say that the DLH is sort of run down and in need of a revamping, it is the original Disney hotel and it has lots of Disney touches. You can find lush waterfalls and a koi fish pond, miniature remote-controlled Jungle Cruise boats, various Mickey statues, a wall of old Disney memorabilia - it's just cool. It is cheaper than the GCH and slightly more expensive than the PPH. Also, it is located right at the tail end of Downtown Disney, but you can choose to take the Monorail into DL if you prefer that over walking the course of DTD.
The Paradise Pier Hotel is newer and shinier than the DLH, and it is a perfectly fine place to stay (being the cheapest of the 3 DLR hotels), but it lacks the sprawling grounds of the DLH or the GCH, so there is not much to it. There is a Goofy statue in the lobby, and little touches of the sea/beach/surf theme in the rooms and along hallways, with cute pastel coloring, but it is pretty basic. I stay there when I can't afford the DLH or the GCH because I like to be onsite. The PPH is across the street from the 2 parks, but you can use what we call the 'short-cut,' and cross the street, walk through the GCH lobby and onto DTD for the path to the parks' entrances, so in that case, PPH does not seem AS far away.
Staying onsite/being a guest at any of the 3 hotels provides you (1) with access to the DCA entrance in the GCH, as well as (2) use of Magic Morning (early entry) on whatever days it is offered, and (3) the nifty service of having your purchases in the parks sent back to your hotel so you don't have to schlep them around with you or rent an expensive locker - a service I have used many times and it was great for me, becase I am a klutz and I hate to carry extra things with me if I don't have to.