This place used to be a vegan B&B and Loving Hut combined. They've closed the Loving Hut so now it's just a B&B (called a hostel, but it's more like a boutique hotel) and they deliver breakfast from the other Loving Hut. At 2000NT / night (or double in the weekend) it's not the cheapest around, but not much more expensive than other hotels, and much much nicer (and vegan!). This is the place to stay in Hualien, and even if it's above your regular budget it's worth considering splashing out for one night here (just make sure it's during the week, when the gorge will also be quieter!).
I've updated Happycow and sent the website to them.