Actually the onsens are fairly new here... they only discovered the hot springs around 1910. We were lucky they did; even if Touya-ko is a bit touristy nowadays.
The lake, as mentioned before is actually sitting in the residual of a giant volcano that had destroyed itself in a distant eruption. Indeed it's the third largest such caldera lake in Japan. At 180m deep, it's also one of the scariest. It's so deep, ice doesn't form on it in winter. The lake itself is about 43 km around, and about 9-11 km wide.