Austria in May- Itinerary Help

If you're not going to rent a car, your trip will be more difficult. Trying to hit all those small towns will be tough--if not impossible. And the time you have allotted for Munich is pretty short.

I would suggest you catch a train down to Innsbruck--about 2 hrs. ride--if your daughter enjoyed Switzerland so much. I never get tired of the vistas there and from the top of the mountains there. And you can catch another train to Salzburg. The Bavarian castles are overrated.

Thanks. I was thinking of staying in 1 town for 3 nights where we could get the most out of our travels goals: walking around, enjoying the culture, beautiful scenery, doing 1-2 hikes, and some other activities. I am just concerned with what will be open and have good hiking conditions towards the end of May. When we were in Switzerland last year, most of the trails didn't open until the middle/end of June. I am concerned about staying at a town on the lake with not much to do. We didn't want to spend more than 2 days in Munich. My daughter will be touring all of those cities in college.

You can combine city sights with hiking in the Innsbruck/Seefeld area, staying in either town.

Hiker's dream is the town Seefeld in Tirol above Innsbruck, i.e. a small plain in an elevation of 4000 ft, providing 100+ hiking routes of different length and severity.
https://www.seefeld.com/en/summer-3/walking/hiking-trails

You may commute by train (a scenic ride of 36 minutes) between Seefeld and Innsbruck (and vice versa). The route is a technical masterpiece of 1912, the first fully electrified railway in Austria which set eventually the standards for electrification in Europe. Most spectacluar is the crossing of the Martinswand where the track is "leaning" against a near vertical mountain cliff.

Me, I’d go with Innsbruck or Mittenwald.

You could also base in Berchtesgaden (40 minutes from Salzburg but much more alpine scenery, area) for 3 nights. Cable car trips, Konigssee, etc.

Werfen - castle, Ice cave

Frankly, I would not call that a trip to Austria. It's a trip to Germany with some side trips. Thats not a bad thing but I think you are missing out on exploring the rest of a great country. For an Austria trip, I fly into Vienna, spend at least a few days, rent a car and then travel to Salzburg from there. Munich and other extraneous German highlights can be visited in a trip to Germany....or if you must, fly out from Munich.
Austria is such a great place to visit. It's a shame to reduce it to Salzburg.

The OP has only 7 nights and wants to include an area reminiscent of the Berner Oberland. Cable car trips, alpine area, cute old town or village. Everyone has their own likes. We for example have been to Austria 11 times, always flew into and out of Munich and have never been to Vienna. We have no interest in seeing Vienna. We have stayed only one night in Munich also. Not our thing, kind of place. Subjective to the traveler.