I recently stayed for 2 nights with my wife and 2 children (2.5 and 5 years old). The free shuttle bus from Karuizawa station took 40 minutes and is a pleasant drive up the mountain. Check in was quick and easy, my wife is Japanese and I speak some but some staff there it seems can speak English if needed. We stayed in a duplex room which was well equipped with toys in good condition. The upstairs bedroom is pretty quiet and I slept well, especially on the 2nd night. The beds are firm but that is OK with me. Typical small unit bathroom but OK, I did use the shower one morning before breakfast which was a bit tricky to get a good temperature, however the hotel onsen public bath is very good so it's better to use that anyway, if you don't mind getting naked with other people. The only thing I would say about the room is that there is nothing to sit on in the living room part, I accept that most of the guests are probably quite used to sitting on floors but even one chair would be nice. The room had a new air conditioner and was plenty warm enough.
The food was pretty good for buffet style with plenty of choice and there were 3 restaurants to choose from, dinner styles being westernish, Chinesey and Japanese, with efficient service and all-you-can-drink options. The kids fun park is a 600 meter walk away or there is a shuttle bus running back n forth every 30 minutes. The big wheel and other mechanical rides are closed through winter but there are plenty of branded toy playrooms full of things to play with and there was a small toboggan slope, snow play area, adventure maze and bouncy castle, well enough to spend happy hours with. There is also a playroom in the hotel for young children. I didn't use it this time but there is a free shuttle bus to a ski area.
If you have young children they will love this place and both myself and wife thoroughly enjoyed ourselves too, so much so that I think we will go back for a long weekend in February, I think this place is good value for a family get away.