My main recommendation here is the Gritti Palace which has undergone a very extensive (and expensive – €35m) renovation and reopened in 2013. It looks and is indeed wonderful. www.thegrittipalace.com.
Other options in Venice
Closeby, technically in the Castello district, is the Danieli Hotel, traditionally seen as one of the standard bearers in 5 star hotels in Venice. The Gritti, in my view, is a better, more intimate option. Across the lagoon, but only a short ride in their launch is the fabulous Cipriani Hotel. The main advantage this hotel has is that it is away from all the crowds. If you prefer a contemporary style, then there is the Aman Hotel, which is closer to the Rialto Bridge area. Also in that area and a more affordable 5 star option would be the Ca’ Sagredo Hotel.