We just spent two days/nights at the Book Factory Hostel and could not have been happier. We were a bit worried about the “hostel” in the name, despite all the good reviews, but this is actually a very nice little boutique hotel, very modern and comfortable, with a bit of a hipster vibe. (They do seem to have a dorm room as well, to accommodate pilgrims on the Camino de Santiago.) The staff is very welcoming and helpful. The location is great, very close to the cathedral and the university, and to several museums, and walking distance to about everything else. Lastly, the very cool attached cafe/bar is wonderful - for breakfast/lunch/dinner/coffee/drinks.
We would not hesitate to stay there again.