From a non chain boutique hotel standpoint XV Beacon does a very good job and is located not far from the State House and Beacon Hill-- they have a great steakhouse downstairs. The Eliot also falls into this category but is a little more formal and not my favorite option but worth a look.
The Boston Harbor Hotel is also independent and right on the waterfront-- this would be more walking distance to the financial district, water front attractions, and Faneuil Hall area. It's a full service luxury hotel so won't fit your "small" requirement.
The Newbury Hotel is the former, locally beloved, Ritz-Carlton (as in old school Ritz Carlton from 1927, not the current Marriott brand) and has been recently thoroughly renovated and updated. Location is incredible right on Boston Public Garden and walkable to most things in the city.
My personal favorite hotel alas is part of a chain. The Fairmont Copley Plaza Hotel oozes old Boston style and has an incredible sense of place in the city. Located on Copley Square you can easily walk to Back Bay shopping or to Boston Common/Public Garden and all the historical sites.
None of the options above are inexpensive but you won't be able to mistake any of them for being anywhere but Boston. Boston overall is a great walking city and most things are about 10-15 minutes brisk walk from each other so thats less of an issue when choosing a hotel in the downtown core.