Hi. I would choose Munich as my hub. From there you could take day trips, or multi-day trips via train north (Regensburg, Augsburg, Nurenberg, even Rothenburg), south (Garmisch, Mittenwald, Innsbruck), east (Salzburg).
Munich itself offers so many experiences: multiple Christmas markets, including my current favorite, the medieval festival; churches - I had a near-mystical experience in Der Alter Peter on a Saturday evening. It was called Night Fever and the entire church was lit by candles while a small guitar/choral group provided music. Outside, thousands were carousing in the main Markt, which was too overwhelming for me. I also serendipitously stepped into the Theatinerkirche on a Sunday morning while I was walking to the Alte Pinokothek and experienced - for a brief time - a Sunday service. I could go on and on.
On this most recent trip - Dec 2019 - I took a train down to Garmisch which was easy to achieve. The market there was of a village sort with local organizations selling sausages and wine and homemade ornaments. Oddly enough, one of my favorite experiences there was stepping into the local H&M store and trying on winter fleeces with local shoppers.
I have not recently achieved visiting any of the "northern" destinations I listed above, so these are on my radar. However, the mountains always call me, and I enjoy the Brenner Pass train route with its many options to stop: Innsbruck, Bolzano, down to Verona (and on a perfect trip, over to Venice). I encourage you to explore the Tyrolean Christmas markets, some of which have dates beyond Dec 25.
Depending on your timeframe, a compact multi-day trip may include Munich, Salzburg, and Innsbruck (or the region), circling back to Munich. Or M - I - S. For me, short trips to Vienna have not been totally satisfactory as I felt rushed.
Now, my ultimate longish trip would start in Strasbourg, on to the Colmar region, taking in the Black Forest, down through Switzerland, over to the Brenner Pass via the Arlberg Pass trainline and then down to Venice, time permitting, or up to Munich and home if not as much time. This would encompass quite a bit of time. I have not really planned out the entire concept but could break it into chunks, if time necessitated.
So many possibilities: Munich remains a great hub for train travel and is also quite walkable.
PS, I have no experience with Christmas in Berlin but have read some inviting descriptions of Christmas there and in the surrounding Harz Mountains.
Enjoy your planning and your trip.