onsengai de yumeguri wo suru.

It is read:

おんせんがい で ゆめぐり を する。

A natural pronunciation flow is:

おんせんがいで ゆめぐりをする。

Word by word:

• 温泉街 = おんせんがい
• で = particle で
• 湯巡り = ゆめぐり
• をする = をする

温泉街 means an onsen town or hot spring resort district.

It is made of:

• 温泉 = hot spring
• 街 = town / district / streets of a town

So 温泉街 is not just one hot spring. It refers to an area where there are multiple inns, baths, shops, and streets centered around hot springs.

で marks the place where an action happens.

So in:

温泉街で湯巡りをする。

the 湯巡り takes place in the onsen town.

You can think of it like:

• 温泉街で = in the onsen town
• 湯巡りをする = do hot-spring hopping / visit different baths

A learner might wonder why it is not に.
That is because に usually marks a destination, a point in time, or the location of existence, while で marks the location of an activity.

湯巡り literally means going around hot springs/baths.

Parts:

• 湯 = hot water / bath / hot spring water
• 巡り = going around, visiting in sequence, making a round

So 湯巡り means something like:

• hot spring hopping
• visiting multiple baths
• going around different onsen

It is a real and natural expression, especially in travel or tourism contexts. It has a slightly enjoyable, leisure-travel feel.

Japanese often uses a noun + をする pattern to express an activity.

So:

• 湯巡り = a noun meaning hot-spring hopping
• 湯巡りをする = to do hot-spring hopping

This is very common in Japanese. Compare:

• 勉強をする = to study
• 散歩をする = to take a walk
• 旅行をする = to travel

You may also see expressions with a plain verb in other cases, but 湯巡りをする is perfectly natural and straightforward.

Here, 湯 has a more traditional and onsen-related feel. In this kind of expression, 湯 often refers to bathwater or hot spring baths.

So 湯巡り feels like:

• going from bath to bath
• enjoying different hot spring baths

If you said 温泉巡り, that could also be understood, but it tends to sound a bit more like visiting different hot spring places/sites in a broader sense.
湯巡り often feels more tied to actually enjoying the baths themselves.

を marks the direct object of the verb する.

In this sentence:

• 湯巡り is the thing being done
• so it takes を

That gives:

• 湯巡りをする = to do hot-spring hopping

This is the normal pattern for activity nouns used with する.

Yes, the subject is omitted, which is very common in Japanese.

The sentence does not say explicitly who is doing it. Depending on context, it could mean:

• I do hot-spring hopping in the onsen town
• We do hot-spring hopping in the onsen town
• Let's do hot-spring hopping in the onsen town
• They do hot-spring hopping in the onsen town

Japanese often leaves out the subject when it is already understood from context.

Yes, it can be a complete sentence.

温泉街で湯巡りをする。 is a plain, non-past sentence meaning something like:

• (I/We) do hot-spring hopping in the onsen town
• (I/We) will go around the baths in the onsen town

Because Japanese plain non-past can express:

• habitual action
• future action
• general statement

the exact time depends on context.

It is in the plain form, so it sounds neutral and casual by itself.

The final する is dictionary/plain form.
If you wanted to make it polite, you would say:

温泉街で湯巡りをします。

So the original sentence is suitable for:

• casual conversation
• travel notes
• headings
• simple descriptions
• diary-style writing

Japanese word order is somewhat flexible, but this order is the most natural and clear:

温泉街で湯巡りをする。

That follows the common pattern:

• place + で
• object + を
• verb

You might change word order for emphasis in some contexts, but for learners, this is the best standard pattern to remember.

Yes. Both are reasonable ways to understand it.

A more literal sense is:

• go around the baths/hot springs in the onsen town

A more natural English travel-style rendering might be:

• go hot-spring hopping in the onsen town
• visit different baths in the onsen town

Because the meaning has already been given to the learner, the important thing grammatically is that 湯巡りをする is an activity expression, not just a simple motion verb like go.

Often, yes, but not always in a strictly literal sense.

巡り suggests:

• visiting several places in turn
• making the rounds
• going from one thing to another

In 湯巡り, it usually implies moving from bath to bath or onsen to onsen as part of an enjoyable activity.

You may also see similar patterns like:

• 寺巡り = visiting temples
• 名所巡り = sightseeing around famous spots
• 食べ歩き is a different pattern, but similarly expresses going around enjoying something

So 巡り gives the idea of a tour or round of multiple places.