Cet hôtel est dans une rue très bruyante  is correct and it is the usual way to express it. We would not normally have sur in this sentence.

If we give the name of the street we can have either:

• La boulangerie est rue Lafayette.
  or
• La boulangerie est dans la rue Lafayette.
  I don’t use this last one but I’ve heard people say it.

I don’t like the possibility of having dans in that case because of the ambiguity the dans contributes to avoid when used properly:

• a) La boulangerie est rue de la Gare.
  → It’s the name of the street (capital G, but you don’t see it when asking your way!) but the rue de la Gare isn’t necessarily in the same street as the station¹.

• b) La boulangerie est dans la rue de la gare.
  → The boulangerie and the station are in the same street.

I suppose one could say:

• La boulangerie est sur la rue Lafayette
  but I must say it sounds really weird to me and I would not use it. There might be regional variations to that.

You might have come across sur with the verb donner and maybe that’s what caused your confusion:

• Cet hôtel donne sur une rue très bruyante.
• Cet hôtel donne sur la rue La Fayette.

It would be the same with a monument (not usually sur):

• Le Louvre est (dans la) rue de Rivoli.

Note it would be different with Boulevard and Avenue.

• Le Balzac de Rodin est (sur le) Boulevard Raspail.
• L’Hôtel des Tilleuls est (sur l’)Avenue des Tilleuls.
  I would not say dans in this case, some people might.

^{1 And the station might altogether not be there since so many small stations have long been closed, it could have been demolished but the name of the street remains. 8% of French communes have a rue de la Gare}