I'm not sure what you mean when you say that traveling to the south of France seems like it would be difficult and take a lot of time and end up costing more. More than what?
I'm also not sure what you mean when you say traveling through Iceland doesn't include any additional fee for train travel, Amsterdam isn't too much (I was surprised).....
If you only stay in Amsterdam, you will want to have a transit pass for the number of days you are there (not terribly expensive). Yes, you can walk to many places, but it gets tiring to walk everywhere. If you go elsewhere in the Netherlands, you will be taking trains (supplemented with some buses).
If you go to Iceland, there are no fees for trains because there are no trains. But to get outside of Reykjavik, you will either need to take buses or rent a car and pay for gas.
If you go to France, you can either take buses and trains, or rent a car and pay for gas and tolls. Which is cheaper, easier, etc. depends on what part of "the south of France" you want to visit. For instance, for the Riviera (Nice, Monaco, Cannes, etc), buses and trains work very well and are dirt cheap. For small towns north of Avignon (Isle sur la Sorgue, St. Remy, etc), a car works much better. Again, how "difficult" all this is depends on your particulars - where do you want to go, how many people are traveling, which airport do you fly into and out of, etc.
For France, do look into flying into Nice, Marseilles, Lyon, Bordeaux, or Toulouse, at least one way. It may or may not cost any more than flying into Paris, and you will be much closer to places you want to see in the south of the country.
I do agree with your approach that when it comes to cost, you should not only look at airfares, but total costs including local transit. So, look into costs of rental cars where one is needed, making sure the car is large enough to hold not only all the passengers, but also all the luggage. Don't forget that gas is much more expensive in Europe than the US. And look at train prices too; remember that French trains can be cheap if you can buy in advance and commit to non-refundable and non-exchangeable tickets. On some routes, like those around Nice, the trains are unreserved and don't go up even for last minute purchase; for other routes (say, Paris to Avignon), they can be cheap in advance, but very expensive at the last minute.