The DWB entry for zu might be one of the longest dictionary entries ever written. There is a section on the locational meaning (i.e. indicating a place) of the preposition zu under (C.) III. This usage should be familiar to native speakers from biblical language.
da Jesus geboren war zu Bethlehem
und es begab sich, als er zu Tisch saß im Hause
To language learners, it should be familiar from the exceptional use of zu in
ich bin zu Hause
Also, as has been mentioned already, there is the
Universität zu Köln
Then, there's names of nobility
Karl-Theodor zu Guttenberg (after the family castle)
The use of zu for regular names as well as inns and taverns derives from the locational use, indicating where the establishment in question is located:
Gasthaus zur Mühle, zur Linde, zum Winkel
With the noun referring to the place the inn is found, e.g. next to a mill. All of these are also found in family names (written as Zurmühle(n), Zurlinde(n), Zumwinkel).
If there is no mill or tree next to the inn, the sign on the outside can substitute. This is how you get:
zum Löwen, zum Schwan(en), zur Krone
(As the adverbial preposition has been reanalysed as part of a name, the zu is now often capitalised.)
Finally, in analogy to those names, you get names such as:
Zur schönen Aussicht
In short: The meaning of to in these examples is originally at, indicating a place. This usage is preserved in biblical usage and family names. While this meaning is no longer current, it became the standard for naming restaurants and hotels and is productive in this function.