Mi ne volas ian tro grandan hotelon; mi preferas malgrandan dometon apud arboj.

Because hotelon is the direct object of volas. In Esperanto, direct objects usually take the accusative ending -n.

So:

• Mi volas hotelon = I want a hotel
• hotelon is the thing being wanted, so it gets -n

The same idea applies later with dometon, because that is the thing the speaker prefers.

Because words that describe or determine a noun must agree with it.

Here, ian and grandan both go with hotelon, so they match it:

• ia → ian
• granda → grandan
• hotelo → hotelon

This is normal Esperanto agreement:

• adjectives take -j if the noun is plural
• adjectives take -n if the noun is accusative
• words like ia behave similarly in this kind of noun phrase

So ian tro grandan hotelon is a fully matching phrase.

ian comes from ia, which means some kind of or a certain sort of.

In this sentence, it makes the idea more general: the speaker does not want any hotel of that overly large kind.

Without ian, the sentence would still work:

• Mi ne volas tro grandan hotelon

That is simpler and very natural. Adding ian gives a bit more of the feeling of that sort of hotel or any such hotel.

tro means too or overly. It is an adverb, and here it modifies grandan.

So:

• granda = big, large
• tro granda = too big, overly large

Putting tro before the adjective is the normal pattern in Esperanto, just like placing too before an adjective in English.

dometon is built from several parts:

• dom- = house
• -et- = diminutive suffix, meaning small or little
• -o = noun ending
• -n = accusative ending

So dometo means little house, small house, or often cottage.
Then dometon is that noun in the accusative.

A little, yes, but it is still natural.

• dometo already suggests a small or modest house
• malgrandan explicitly says small

Using both together reinforces the idea. It can sound like:

• a small cottage
• a little small house
• a nice modest little house

In this sentence, the speaker is contrasting it with an overly large hotel, so the extra emphasis on smallness makes sense.

Because malgranda is the regular opposite of granda.

Esperanto often forms opposites with mal-:

• granda = big
• malgranda = small

This is one of the most common and basic word-building patterns in the language. There are other ways to express smallness in Esperanto, but malgranda is the standard straightforward word here.

Because after a preposition like apud, the noun normally does not take the accusative -n.

So:

• apud arboj = beside / near trees

In Esperanto, the accusative after a preposition is mainly used to show direction or movement toward something in certain contexts. Here the phrase is just describing location, not motion, so plain arboj is correct.

arboj is plural because the speaker imagines a place next to trees in general, probably more than one tree.

There is no la because the trees are not being identified as specific trees already known to both speaker and listener.

So:

• apud arboj = near trees
• apud la arboj = near the trees

The second version would suggest some particular trees already known from the context.

Esperanto has no indefinite article. It does not have a separate word for English a/an.

So a bare noun can mean:

• a hotel
• a cottage
• or just the noun in a general indefinite sense

Esperanto only has the definite article la, which means the.

Because the sentence has two separate clauses:

• Mi ne volas ian tro grandan hotelon
• mi preferas malgrandan dometon apud arboj

Each clause has its own verb, so repeating the subject mi is normal and clear.

The semicolon simply links two closely related independent statements: first, what the speaker does not want; second, what the speaker prefers.

Because preferi is a transitive verb in Esperanto. The thing you prefer can be the direct object.

So:

• Mi preferas dometon = I prefer a cottage

That is completely normal.

If you want to compare two things explicitly, Esperanto can also use ol:

• Mi preferas dometon ol hotelon = I prefer a cottage rather than a hotel

But in your sentence, only the preferred thing is stated directly, so dometon simply appears as the object.