Onsen - Kusatsu or Hakone for daytrip

I would like to do a day trip to an Onsen with kids from Tokyo using the JR pass.

I narrowed it down to either Hakone or Kusatsu

Hakone
- Daytrip may be more expensive since the JR Pass is only good to the Odawara station.
- A view to Mt Fuji would be nice from here...no guarantees.

Kusatsu
- JR Pass all the way here is nice and there are some shows there for cultural immersion.

Which one would you recommend? IS there an onsen that provides transportation from the Odaware station?

Kusatsu has the better water than Hakone, but access is more time consuming. Still, if the hot spring experience is your central goal, I recommend Kusatsu.

However, hot springs are best enjoyed by staying overnight at an onsen ryokan. If anyhow possible, I recommend to extend your side trip to an overnight trip.

Two important things to consider for onsen experience.
One is the onsen water temp.
It is usually 42 degree C or 108F and staying in this hot water may be difficult for kids or even for adults who are not used to such a high temp. You can not add cold water to cool down just for yourself as there are other Japanese bathers who are just fine.
Another is to share the bath w/ nothing on(no swim suits) with other same genders.
If you are not ready for these two, I highly recommend to go to Yunessun in Hakone. It is a warm water theme park designed for day trippers & for kids.
http://www.yunessun.com/english/yunessun.html
Google "hakone yunessun" for more images.