So we went back to that tiny road after confirming that yes that was the right road (Damn! I shoulda kept driving last night), and drove down and it widened out nicely and around the bend, tucked away in the valley was Mugen no Sato.
The building was nice. Good first impression. And the lady charged us less than what I expected. Bonus. We had to check our soap and shampoo at the door, though. The place is famous for its fireflies and you can only use the eco-soap provided so as not to kill the firefly larvae in the river. Ok, no biggie.
The onsen was an outdoor bath. right in the forest. You could hear the river. It was nice, slightly sulphuric, very relaxing. We must've went on a good day cuz it was just us for most of the duration. Jude enjoyed dumping water from basin to basin. Some flowers had fallen in to the bath to add to the ambiance. A nice time was had by all.
When we got out we asked about the fireflies but they don't seem to be in season yet. I will have to go back and check it out. Now that I know how to get there : )