Best 24-36 hour stop between Vienna and Paris (on the train)?

The Paris Olympics may be disrupting travel patterns to Paris, pushing folks who would otherwise have gone there later in the summer to head to the city earlier if they don't have Olympic tickets. Otherwise, stuff just seems to be more expensive this year.

I wonder whether you might perhaps be looking for train tickets before the discounted fares are loaded. I think the schedule changes in early June, which can mean full ticket availability is delayed. If you give us your travel dates, origin/destination details and the fares you're seeing, the folks with special knowledge about the areas you're traveling through can probably provide useful information.

Amsterdam, Brussels and Zurich are all plenty attractive enough to be appealing destinations for the time you have available, but I think Amsterdam has a greater variety of sights and would most likely be the most attractive to the kids. Hotel rates there are reported to be very high. If they are so elevated as to be a problem, post for suggestions in the Netherlands forum. I remember reading multiple earlier comments on staying in Haarlem, which it seems is a short train ride from Amsterdam. You'd need to check the rail fares, of course, because the cost of round-trip tickets for four people from your base town to Amsterdam would have to be considered.

1) We could take a different overnight train from Vienna to somewhere
else (narrowed down to Zurich, Amsterdam, Brussels) spend one
day/night there, and then continue to Paris during the next day.
Nightjet reviews are terrible, I know. the overnight train is
appealing because kids want to do it, we have the time, good
adventure, and saves us a hotel.

Where have you found terrible reviews of Nightjet? Most people seem pretty happy with it. Instead of Amsterdam you can consider Utrecht, the Nightjet stops there about 40 minutes before it arrives in Amsterdam, so it doesn't require a connecting journey. And instead of Brussels, maybe have a look at Aachen or Liège? Or maybe Strasbourg if you want to take a night train.

2) we can take a day train halfway-ish (we are open to anywhere that
splits up the journey and is easy on the train, ex: Munich), spend a
night, and continue on.

There are many options. The logical choice is to look at southern Germany. Munich is certainly worth seeing, but is a large city. Maybe take a look at Ulm and see it it fits your plans.

Sidenote: train prices are much higher than I expected. Am I looking
too early or are they just expensive?

What did you expect? What have you found? Where are you looking for prices? When are you looking for prices?

We do want to take the train as much as possible but I have been
surprised a the prices and that unfortunately flying is cheaper.

If it's about the Nightjet, remember that the night train saves you a night in a hotel. But in general, train tickets are usually pretty affordable when bought a few months in advance. And if you're comparing to the cost of flying, remember to add the cost of travelling to and from the airports.

I take the Night Jet, no sleeper or couchette, only a seat in the 6 seat compartment once or twice on every trip. Night trains are a basic option of my traveling in Europe.

Never have I found the NJ experience unsatisfactory, let alone "terrible" If that were true, (so what?) such "terrible" reviews would have no effect on me at all in choosing a NJ route....basically they would not be worth considering.