Everyone is different, so will just speak to my own experience travelling with littles ones when they were ages 9 mo & 2 yrs (to Germany, Austria, Eastern France) and 3&4 yrs (to Austria, Northern Italy, Slovenia, Hungary, Poland, Czech Republic).
You're wise to consider the age of your toddler to help guide the destination; we also favoured natural settings and smaller towns during the toddler stage. When in the country, our kids loved staying on farms, going to the beach, riding on boats and little trains. When in towns or cities, we always looked for an apartment or hotel near a park or green space and visited a few times a day. It also helped to be in the town/city centre so that one parent could stay in at nap time and the other could sightsee for a bit on their own. Apartments give the flexibility of extra bed rooms so that you can put the little one down and still stay up yourself - also useful during jet lag when one of you will be up early while the other gets a bit more sleep. We still look for apartments with a washing machine.
Also essential to us was the freedom of a rental car ( with a big trunk ), with our own car seats; when possible we made our transitions between destinations during nap time - tried to keep drives under three hours. Diaper bag essentials for us were lots of snacks/picnic supplies, extra wipes and a Tide to Go pen! We did bring a playpen, but found it wasn't essential for us (you can book one at each stay and save carting it around.) We had a double stroller (with tires, not plastic wheels) and also brought a carrier for the little one. We always bring a custom first aid kit with us - has come in handy more than once! I also find different guidebooks/websites that cater to travel with kids to be very helpful in helping to map out local activities that match our families' interests.
Of all the places we've been in Europe, if I were to do a trip during the toddler stage again, I'd choose from Germany (Romantic Road), Austria (Salzburg has an excellent playground beside the Mirabell Gardens, marionette theatre, Hellbrunn Palace trick fountains etc.), Slovenia and Northern Italy (Alpe di Siusi). Lots of natural settings/hiking/water, nice small towns to visit, easy to navigate, short distances between destinations.
Have a great trip!