While in Prague, we rented an apartment. It turned out to be the most amazing place on the top floor of an extremely old building. There were skylights where the kids could watch the moon while they fell asleep, a beautiful balcony view of the rooftops and large church, a two story bedroom, etc. And the price was much cheaper than a hotel.
This was the apartment we rented. It can sleep 6 people. It was 5 minutes from the tourist square, but a quiet street. Check out the website. There were many lovely apartments on there: PRAGUE RESIDENCES