Switzerland restaurants have always been expensive. However, if there is ever one restaurant that serves good food at reasonable cost, Made in Sud is the one. Prices are probably 2/3 of what other similar restaurants would charge for similar items. We got the Octopus Carpaccio, Penne Arrabiata, and a pizza. All of the items were quite Italian-authetic and tasty. We also got a full bottle of good Babera for about 45CHF, roughly 20CHF cheaper than most normal restaurants in Lucerne.
To top it off, service is friendly, fun and excellent. The staff let us sample the wines with large pours before committing. During payment, I was also short on cash (being the last day of the trip) by a couple CHF. I offered to pay via credit card any difference but they just smiled and told me to forget about it--all with a big smile.
Overall, Made in Sud is a fantastic place to go. Be sure to reserve though, especially on weekends. I was turned away as a walk-in on a Sunday night and returned a couple days later with a reservation.
From the train station, it's roughly a 10-minute walk or a bus ride of 3 stops to Pilatusplatz.