If you stay in your hotel room all day on Easter Sunday in Madrid, SHAME ON YOU! If you don't want to take part in the religious ceremonies, go to Retiro Park. You'll find mimes and musicians and jugglers and people just enjoying being alive.
Later, you could go to Plaza de Oriente, across from the Palacio Réal. You won't find entertainment there like in Retiro, but you can mingle with the people. Enjoy!