Personally, I feel both Souta and Sesshoumaru should be spelled with the "ou". If we were hypercorrect, it should be spelled with the o with the line on top, e.g.
here. The o in Sesshoumaru, Souta, and youkai is a long "o", and it is pronounced different from the normal o e.g. in miko or kimono.
Here are examples of Japanese persons pronouncing Kyoto, which contains both a long and a short o.
When writing in Japanese, they use ou to denote a long o, so it derives straight from there.
Though I suppose exceptions for this would be names that have been established in English, such as Tokyo and Kyoto. Both these city names have long o's in them, so they would be Toukyou and Kyouto, respectively. But since we're used to seeing Tokyo and Kyoto, it would just look silly to us.
Edit: It can be down to preference. If you prefer to spell "Sesshomaru", then by all means do so.
But please stick to the spelling option you choose, and spell all other words with long o in them with a normal one, too, e.g. "yokai". Consistency is the key! ^_^
