Lower Bavaria, Austrian Tyrol, and Italian Sudtirol

You can visit Neuschwanstein from afar and view it from the Schwansee and above Füssen on the Kalvarienberg with few tourists.
If you go to Garmisch-Partenkirchen I would recommend staying outside the town as the traffic and construction noise are loud. This is a tourist area. Some good in the Zugspitz, Wank and on to Mittenwald. Checkout the Riessersee for local quiet.
I like the Pustertal (Sesto/Sexton), Seiseralm in Sudtirol. Varenna on the Comer See was great in summer.
With the car you could drive East/West - West/East through the Austrian Alps and hit all the tourists hotspots or chose quiet corners.
https://www.foto-webcam.eu/

Danke. I am wondering if I should simply skip the German side (perhaps except for Neuschwanstein Castle) and just focus on Austria and Italy. This is assuming that I don't rent my car from Germany. Will I miss out much?

Also, I only have about 8 days to spare and need to budget some "buffer time" in case of rain. I understand that Alpine weather is unpredictable. There's no point in going to the countryside if the weather isn't nice.

as for driving in the cities, getting out of zurich ( from the airport ?) is not difficult, we have picked a car up from the airport and its not that far before you are in the countryside.( the airport is far out side the city)
We have driven into and around Munich, Salzburg, Innsbruck ( twice now) and Munich and for some reason Innsbruck seemed busy and not 'friendly' for those who are unfamiliar., you might find them different? ( Munich was big and busy)
the other smaller towns that you mention are a piece of cake, by comparison.
we opt to stay outside some of these cities ( where appropriate) and catch public transport into the city.
eg: stay at Hall in tirol, and bus into innsbruck, stay outside of Salzburg and use the park and ride system etc etc.
as a 'guide' we find the area around Salzburg has more to offer than the G-P general area. there are more 'real' castles than just Neuschwanstein ( just saying!)
if you want to avoid crowds then look for other options, resist the temptation to see the 'ususal' highly promoted places and seek out other options . you might enjoy them more. we often do.
an example would be rather than going to say Zugspitze, ( if you were in Austria) you could visit
the https://www.derdachstein.at/de
it has far more to offer ( views, ice caves etc) , in one place and the surrounding small towns are very quaint. this is just one example.
I wouldn't get too worried about the weather in july, we have spent 3 trips in the alps in june and it can be very hot like30- 35C plus
on some days, in the ski resorts.

hope this helps.

I understand that automatics are expensive and difficult to find.

That is not true anymore. Mostly the very small cars have manual shifting. Just ask explicitly for a car with an automatic gear.

Most important is to return the car in the same country where you picked it up.

I wonder why you arrive and depart from Zurich instead of Munich. Munich is not only closer to the areas you want to visit, but air fares are cheaper, too (as far as I know). In Switzerland everything is very expensive (compared to its neighboring countries), this may be true for rental cars, too.

Check the fine print on the back of your credit cards, they bear promotion codes for car rentals. I always compare the prices between the different rental companies, trying all the promotion codes one after the other of all my credit cards.

Other than Bavarian culture (I do not want to minimise this as it is a real highlight) and Southern Bavarian Germany sites, I don't think you will miss much skipping the Bavarian Alps when on to the Austria and German speaking Südtirol Alps.

An alternative... Never been here, but you could consider Lauterbrunnen, Switzerland (Falls). Could shift to Grindelwald and the Eiger/Jungfraujoch. I have been here in good weather (September) and it was fantastic (most memorable). You could also visit Interlaken. More expensive, but given good weather these Swiss mountains are fantastic.

Hello all: thanks for the excellent advice.

1. Munich as the air arrival/departure city--my spouse will be in Zurich for a business trip. We are tagging a mini vacation to the back end of this. So, we have to fly in and out of ZRH.

If we start our car rental in Munich (which will be cheaper than in ZRH), then we will have to travel to Munich first.

1. Swiss Alps--we have been to the Junfrau/Interlaken area and Zermatt (Matterhorn). Also, these areas tend to be overrun by mass tourism. I bumped into numerous rude tour groups from "certain part(s) of the world"; they have no concept of lining up, of not spitting/smoking/littering everywhere, and of not elbowing other fellow tourists at vista points for photo taking. So, I would like to avoid them at all costs.

I once traveled in the Grisons (Romansch speaking area) in Switzerland. It was refreshingly delightful, because it's still outside the radar screen for international mass tourism.

1. In general, I find Germany to be too corporatized, just like the US. Many stores are big chains often selling goods made in outside the EU. At many restaurants in US, big chains and smaller ones alike, the food is often pre-cooked, highly processed, re-heated at the restaurant kitchen, and served as "freshly made". I would like to escape from this.

I guess the point of vacation is to experience things that we don't normally do in our real lives. I reside in the boring, smog-choked Silicon Valley, and so would like to see something entirely different (bucolic, natural scenery).

I can't speak to Österreich and Südtirol too much as I am in Oberpfalz Deutschland. Not too many tourists my way other than to visit Regensburg, Amberg, Weiden etc.. There are small villages here that Germans outside of Bavaria need translators to understand the local German language. Not a lot of tourism going on here on the border with the Czech Republic and what was the Sudetenland (Pilsen). You want something unique than look at the Oberpfälzer Wald and Bayerischen Wald areas. Mostly Germany tourists here. I'm sure there are similar areas in Austria and Italy. No big mountains or particularly famous sites, but plenty to see and relax. I agree that the large German grocery chains are driving the smaller Bakeri and Metzgerei out of business like the USA 50 years ago. Another crisis is in smaller towns no one wants to renovate the 150 year old plus homes in the Altenstatt and they build new homes on the outside of town. No telling what small town Germany will look like in 25 years.

Thanks for sharing. I guess everyone in the world is probably lamenting the very same phenomenon of disappearing cultural heritage and mass commercialization. It's sad that many suburban areas and neighborhoods in the US look almost the same across the country.