If you go to the Boardwalk at Santa Cruz, be aware there are 3 different arcades, each with a few classics. I didn't know this until I went last week, I found a small arcade hidden near the mini golf course that I'd never seen before. Among a few other classics, it has a very nice Marble Madness, which I played for about 30 minutes, it works perfectly. The main arcade has the most classics, not just in the "classics corner", but it also has a few others spread around, like Super Sprint, T2 and maybe one or 2 others. The classics corner itself has some nice titles, but in overall pretty bad shape in my opinion, which is a shame. The 3rd one has a Rampage, a Galaxian and some other stuff I don't remember, that one's located in about the middle of the boardwalk on the beach side. As far as I know, the Boardwalk is the best spot in the bay area for classics, hands-down.
There's a nice Donkey Kong at Jersey's Cheesesteaks on Hamilton avenue, and good sandwhiches too, that's pretty close to Sunnyvale, not a bad place to go for lunch and a beer. I think they also have a pacman cocktail, or maybe it's a Space Invaders clone? Can't remember...
I wouldn't bother with Nickel City, it's all 60-in-1 sort of stuff, nothing resembling the classics there at all.