After getting soaked through in the rain, we visited a local onsen (hot spring) in Okutama:
That's a genuine onsen and the water quality is superb. I recommend visiting there in early to mid afternoon (e.g., 2:00 pm - 4:00 pm), as it gets crowded with hikers and tourists from Tokyo. Japanese tend to hit onsen (even ordinary bath) before dinner, and that's why it starts to get crowded after 4:00 pm).
We took an express train (90-minute ride from JR Okutama Station to JR Tokyo Station, direct connection), and had dinner together near Tokyo station.
More photos at Tokyo Snow Club's website: