The hostel is just down the canal a little from the centre of the city, an easy walk. The bus to and from the railway station is less than 500 metres away (ignore what Google maps tells you, they'll take you to a toilet in the wrong direction, use the Trip.com map, and click through to Google maps to get it right). Go a couple of km the other way and you're at the Dunhuang Museum. There is plenty of space downstairs to hang out, they sell a few cold drinks, and might even make coffee - they have the equipment). The rooms are on the second and third floor, no elevator. My room, #304, was quite rustic and not very big, but had a small table and adequate bed. The shower was just far enough away from the toilet that the floor there stayed sort of dry. Air con did struggle a bit with the 40 degree heat.
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