Still you are covering waaaaay too much ground. I have traveled 3 times with kids around those ages and I am telling you it is too much. Frankfurt arrival is better. I have not been to the christmas markets at all (we are about to go) but I have done extensive research and I think that you do not need to make a special trip all the way down to Nurnberg... there are tons of awesome markets everywhere, just go to ones where you will be. The german ones will close up mostly by the 23rd. Paris has some through the new year.
There are so many great places to go that do not involve seriously long trip to switzerland.
Frankfurt to Grindelwald is a 5-6 hour trip with 2 connections, Grindelwald to Paris is 6-7 hours on the train with 2-4 connections. Do you seriously want to do this?
This is like arriving in Corpus Christi, exhausted, then a couple days later driving to Dallas, then a couple days later driving to New Orleans. Not to mention while you are in Corpus Christi, taking a "day trip" to Houston, and another day to San Antonio. In my opinion this is way too much.
Pick places that are easy to get to by train. If you base in Frankfurt, you can go to Margraten (but it does look to be about 3 hours on the train each way!). If you want a middel stop I would go to Strasbourg. Easy from Frankfurt and then easy to Paris. Cut the logistics and I promise you will be happier. Oh and traveling, especially by train.... only a carry on size for everyone (plus small backpack). If you show up to the train with a ton of big luggage you are going to be very, very sad.
Near Strasbourg is an amusement park - we were planning to go but then Strasbourg got cut from our trip itinerary because... well, we were simplifying our own logisitics. But it looked super fun! http://www.europapark.de/en
If you wanted mountains, then I would stay in Munich (skipping Frankfurt and Margraten) and go from there... though you may have to day trip, Finding short length accommodations at this late date will be hard. And again, logistics... sleep as many nights in the same place as possible.
Good luck and have a fabulous trip!
Kim