It is perfectly fine to visit Garmisch in mid December. This is not the busy season as it is too early for good skiing (even on the glacier the skiing is so so this early but it is possible). Weather can be iffy any time of the year so don't let that stop you.
Munich and Berlin are great places to visit and a good contrast for the time that you have. I would also recommend one of the Motel One locations if that works for you.
To get around Bavaria, the Bayern Ticket should cover the three of you on days where you are traveling city to city, in Munich it also covers the local trams, trains and buses.
For Munich to Berlin I've done this by car, train and plane and my personal preference would be to fly from Munich to Berlin but only if I could find a cheap (less than 90€) flight, otherwise I'd opt for the train as a second choice.
As for the other poster's recommendation to visit 6 cities (not including Munich) in 9 days, well that is just doesn't make sense especially for one's first time to Germany so keep that in mind when considering their other advice.
DJ