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Here are a few suggestions.
The Castle - The Castle is a B&B in Mount Savage, about 10 miles from Cumberland. It is an old mansion built by a industrial baron in the style of a Scottish Castle. It is off the beaten path, quiet, and has wonderful views. The downside is that you will be at least a 15 minute drive from activities.
The Inn at Walnut Botton - B&B in Cumberland very near downtown. The building is a 19th century federal townhouse once owned by U.S. Grant's wife. It is very convient to everything downtown . I have never stayed there though, so I don't know what the service/decor is like.
Holiday Inn - In downtown Cumberland. Standard chain hotel. It is probably cheaper than a B&B
Rocky Gap Lodge - You mentioned lakeside? This is the place to get that. There is a pretty fancy hotel right on the lake with great views, food, and right in the middle of nearly any outdoor activity you would want. There is also a private cabin for rent, it is pricey and in popular demand, but it has a great view. Downside is, again, you would be about 10 miles from the city.
Hotel Gunther - In Frostburg. It is a old-style hotel on Main St. Nice place, convient to stuff in Frostburg, about 12 miles from Cumberland.
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