"Hotels are room based". You're thinking of generic hotels. I don't usually say this sort of thing, but my hotel was/is generally thought of as the best of the hotels, at least at the time, and a large portion of that was because I bothered to give the level design. Two 100 tile high buildings and a store with no navigation do not make a good hotel.

Mike's level used, if I recall, "Simple". Simple is not a great tileset. Simple is not a limiting tileset. Simple is not a bad tileset, but that's the category it's easiest to put it in. You can create all sorts of things with Simple.

I used YOUR TILESET in an attempt to create a level based on YOUR STORY which supposedly took place in THAT TILESET. I am not saying your tilesets would not work just fine (with the possible exception of, say, Lava Cave) for a GENERIC BATTLE LEVEL. I am saying that they ARE generic tilesets with nothing more than the basic tiles. MOSTLY. Stuff like the neon pink panther was cool, but for the most part they have nothing really new.

Flash: Did I never say middling tilesets made bad levels? No. If I did, sorry. What I said was that middling tilesets just don't get used as much. Because I keep mentioning my own stuff, I'll use one of my levels as an example:
I once made a battle level using Radium's Cornflake01 tileset. In case you're not familiar with the tileset, it uses approximately six colors and the available tiles mainly consist of a bowl, a single color spoon and some floating cornflake tiles. The level did not have the best design, and I could probably do better now. That part was MY fault. However, the tileset did not have slopes, or any horizontal/verticle tiles, which are the main sources for creative design/eyecandy. There was not much you could do with it.
Now let's look at Spacey Universe. This tileset is also limited, but less so, because of the lack of animations. It's also kind of low on block merging tiles. However, Spacey Universe is one of the best tilesets in existence for creative design and eyecandy. I'm not sure I've seen two levels using that tileset which are the same in any way.