Phnom Penh is still a rather small city, especially by Asian standards. There are (or were) few high-rise buildings, which is one of its charms. There are many small and medium sized hotels, especially budget accommodations, although some of them are quite nice.
Those looking for a bit of history may want to consider a night or two at the Raffles Hotel Le Royal, which was originally opened in 1929 and frequently ranks among the best hotels in Asia. In addition to the old Le Royal, there are a few other fairly luxe small hotels. I've made a short selection below that includes some ‘boutique’ options that might not be fancy but have a certain posh factor. You can check out more hotel options if you don't like my suggestions.