We have stayed for a week at Araça Praia Flat in early August. Natal is a wonderful city and the weather was great.

Room: Our room had a great balcony, viewing the green ocean. Make sure to ask for a room facing the ocean, otherwise you may have a concrete wall for a view.
Don´t expect any luxury inside the rooms, they are very simple, but clean and spacious. The bathroom could use a renovation and the " kitchen" area has a mini fridge, a sink and a micro-wave. The TV is old, but has a good variety of channels on cabo.

Hotel overall: Araça Flat is in a great location, just in front of a pedestrian area in front of the beach ... no need to cross any streets to get to the sand. And no need to use a car to get to restaurants and a few shops.
The breakfast is good, with a variety of bread, cakes, juice and fruit. Try the Tapioca (typical food from the northeast of Brazil)! We had dinner only one night at the restaurant. Food is ok, but simple with good size portions though.
Upper deck is were the breakfast is served and the swimming area. Pool is really too small!! I haven't seen anyone use it. But, you have the ocean just in front, so it wasn't a big issue for me.

What to do: If you walk outside the door that goes to the beach, during the day you can just rent a chair and stay right in front of the hotel at the beach the whole day ... just great! Make sure to get there early to get a chair since they beach gets very crowded specially on weekends. At night, walk to your right at the pedestrian area and a few blocks away you'll find several restaurants and a lively area near " Morro do Careca" . You can also go towards the main avenue: 3 blocks up hill (You gotta be on shape!) to find a nice sea food restaurant (Camarões) and some shops.
During the day I would definitly advise to take some side trips (with a guide) to Praia da Pipa, Praia do Madero, Galinhos and don't miss going to the "dunas" for a long buggy ride.