Advice needed for: Germany, Switzerland (possibly Austria) Itinerary (10 days)

Are you committed to driving? Parking can be very difficult around the cities, gas and tolls are expensive , and vignettes can be required.
And- Do you know that international drop off fees are significant? Also, the Swiss have a world class train system that is a pleasure to use.
A few thoughts-
Skip Bern. You could put Lucerne at the end of the trip and easily get to the Zurich airport from Lucerne. It's an hour + train directly into the Zurich airport. Works if you don't have a super early flight out.
The castle in N'stein Palace in Fussen is a tourist trap, IMHO. It's a long day and involves a lot of walking, and the tour is 30 minutes and mediocre. Check into the renovation going on, as you may not see many rooms in the Palace. If you're sleeping in Fussen to break up your trip, a walk up to the Palace would allow you to enjoy the views, without going inside.
Salzburg is beautiful and worth visiting , and it's an easy train ride from Munich. But it does add to your short stays. Any chance you'll be back?
Stay the entire time in the Berner Oberland in one place. Interlaken is a transit center, not a quaint Swiss village. So, just throwing out some random thoughts, hope it helps.
It's great that you can have this family adventure. Safe travels!

I would skip Luzern, Bern and Interlaken. Although Pat does have a point that Luzern is very close to Zurich by train. I'd add at least one night to Salzburg and a night to Lauterbrunnen. With a day trip to Grindlewald that would give you two additional days - one to explore the Murren side of the valley and anoother to explore the Wengen side.

First, let me point out that in AUG most of Bavaria will be on holiday.

Munich has a lot to recommend and see, two nights is a minimum if you want to see some of the best places. I highly recommend the Duetsches Museum for the scientific stuff, the Alte and Neue Pinakothek's for the art, and Schloss Nymphenburg for a good idea of what "the castle" (assuming you meant Neuschwanstein) would have looked like if it had been completed.

If you're going to be there around 23 AUG you may also want to include a day n nearby Augsburg for the fest: https://augsburger-plaerrer.de/

I would recommend you stop by Chiemsee if you're driving to Salzburg.

Fussen is actually a bit out of the way if you drive, Reutte is a better choice.

Don't pass the chance to cut through Lichtenstein on the way to Lucerne. You can't tour the castle, but it's one of those small countries most people never get to.

I'd probably cut off Bern.

Lauterbrunnen and Interlaken are only 15 minutes away from each other. No need to stay in both. And Interlaken itself is not very interesting. It is a convenient hub from where you can visit other places, like Lauterbrunnen.... So just add that night to Lauterbrunnen or to Luzern.
Also be aware that almost all interesting sights in that area are not accessible by car. So your car will spend all that time just parked in the car park. (Hopefully your accommodation has parking. That is not a given...). And those mountain railways and cable cars are expensive, unless you invest in a transit or discount pass. And the car rental will be expensive too...

My suggestions: Never spend less than 2 nights in a place. You have travel days and sightseeing days. If you spend only one night in a place all you will do is travel, and you will not do sightseeing...
Consider using the train in Switzerland. Lauterbrunnen is slowly being destroyed by cars. Do not add to the destruction.

Depending on when your flight is out of Zurich you could just stay in Lauterbrunnen till the end, and then just take the train from there to the airport.

I know the temptation of, “we’ve flown all this way, and we want to see it all.” But resist the temptation. Having been to both Bavaria and Switzerland (with kids, ages 8/11 in Switzerland and 14/17 in Germany) both of them are absolutely astounding and deserve a non-rushed experience. With 10 days, I would do either a Germany trip or a Switzerland trip, but not both.

If you absolutely insist on doing both, I would fly into Munich& do five days there with a rental car. It’s only 1.5 hours from Munich to Fussen (Neuschwanstein etc.) so a good day trip. Salzburg is also 1.5 hours drive. Then, I would drop the rental car off in Munich and take the Flixbus from Munich to Zürich. (About 4 hours, $25.) You can also fly but it doesn’t really save any time and there are more variables to go wrong. I would take the magnificent and easy Swiss train ride from Zurich to car-free Murren (part of which is on the spectacular Golden Pass route from Lucerne to Interlaken). I’d park it here for 4-5 days as there is plenty to do in town and it’s the most amazing scenery EVER. (We loved the two room family suites at Hotel Alpenblick.) You can then fly home from Zurich or Geneva, whichever is cheaper - each is equidistant from Murren.

It would be helpful to others on the newsboard if you told us your car rental company, and how much the second-country "drop charge" is. Thank you.

Please tell us if this is your first trip to Europe? I say this as a kindness, not an insult. But you are making some serious mistakes. Between public parking garages (not adjacent to the hotel) and check-in and check-out formalities, and learning local transit, you will be wasting HOURS each day, in addition to your long drives. I suggest that you limit your trip to the southern half of Germany (plus Salzburg), even if you have unchangeable tickets home from Zurich. Yes, I am telling you to give up on being able to say, "We saw Switzerland."

You may find it is too late in the Europeans' own vacation season (as well as ours) to book the hotels you want. Make some online booking study now.

For example, since you are stuck with the car, you can add a night in Munich and do Garmisch mountains and Dachau (if you think the children are ready for it) as a daytrip. Lake Konstanz and the Rhine west of Zurich have lots to see, and plenty of hiking.

If I were in this area in August, I would go to the Bregenzerfestspiele, with a massive stage built on the water. But you have to evaluate the programs, for your children.

I really appreciate this community's feedback and perspective- thank you all so much and keep the thoughts coming...

A few additional points...
1) I can cancel our rental car - I was torn and thought it would give more flexibility but would definitely enjoy the train experience much more. I am leaning towards the suggestion to keep the car for the Munich based portion and train on from there.

2) it sounds like i could extend time in Munich and treat Fussen/Neu. Castle and Salzburg as day trips. (I am not as inclined to see the castle either, but my children are and I want them to feel like they have some say (lol) ). Or possibly stay overnight in fussen if moving that direction.

3) If I extended the time in Munich, return car there, would the recommendation be that we then do a train from Munich or Fussen to Interlaken then train to Lauterbrunnen (which i imagine would be a long day). Or would you keep car and return in Interlaken? And then as many recommended, stay the remainder of the time there to fully relax/enjoy hikes and other adventures in the area (and places like Mullen and Grimmelwald can be day trips via train or bus, correct?) - apologies for my poor spelling. Could also stay 4 nights in Lauterbrunnen, 2 in Lucerne for that period.

4) Lastly We fly out of Zurich midday... is it risky to train in from Lauterbrunnen the day of our flight (as in not stay the night closer to airport)? Is staying in Lucerne preferred for direct/short train ride?

Salzburg is lovely but since you will be spending time in the city of Munich, I would personally skip Salzburg and go and stay at least one night in Fussen. We really enjoyed the castles and I wasn’t sure we would. Also there are so many bike trails around the area and you can rent bikes easily and the countryside is beautiful. I know my kids would have liked that more at those ages rather than going to another city. The Lauterbrunnen area is amazing. If you can stay in Wengen or Mürren you will be away from the tourist jams in the valley.

Here is a link to information about hiking and other outdoor adventures https://www.germany.travel/en/nature-outdoor-activities/hiking.html

is it risky to train in from Lauterbrunnen the day of our flight

Yes. Actually, not so much risky as getting up very early and then stressing about making your flight. You can spend the day in Lauterbrunnen and catch an early evening train to a Zurich airport hotel. There will be meal service available on the train https://www.sbb.ch/en/travel-information/services-on-train/sbb-restaurant-bistro.html, which might be a fun, final treat for the kids.

Regarding your comment that Fussen is on the way to Switzerland- it looks that way geographically but it is not faster than Munich to Switzerland because it’s not serviced by high speed rail and you have to cross mountains. Use www.rome2rio.com to compare the various ways to get from one place to another and you’ll see that it’s faster to do Munich to Switzerland than Fussen to Switzerland.

Regarding Neuschwanstein castle - my kids loved it (and so did the parents). Have they read the Land of Stories books (particularly book 3)? If so they will totally geek out over the castle. Mine were so excited.

I would for sure ditch the car. Trains are my favorite part of Europe, and kids love them too! We went to Europe quite a bit when our kids were your kids' ages and I will tell you that is waaaaay too much moving around. My kids were alwasy wrecked for a solid couple of days upon arrival.

One major highlight we did was taking a Mike's Bike tour from Munich to Neuschwanstein. We biked around, went to an alpine slide, had lunch, and saw the castle. Fabulous day!
https://www.mikesbiketours.com/tours/neuschwanstein-castle-bus-bike/

(not sure if they still have the alpine slide part, it's not listed, but may just be there...)

We have also rented bikes in the Englischer Garten. We got e-bikes from here - your kids may be too young for those but there are plenty of places and maybe this one has non-e too..
Veterinärstraße 16, 80539 München, Germany

The Nazi Documentation Center in Munich was fascinating.

If you extend time in Munich, you could just train over if you want to see Salzburg.

Definitley ditch the one nighters... I have not been to Switzerland but looks like lots of people chimed in good advice on that. If you have 10 nights I would splut between 2 places or worst case like 4-2-4 or 4-3-3 or something like that... more on the front end since the trip I think for kids is harder ar the beginning... hard to wake up and get on the right time (we are from west coast though so maybe worse or better for you depending on where you are coming from ).

have fun!!!
Kim

I have a different take on the rental car. I have made several trips hiking to Austria and Switzerland. Rental cars make getting to a multitude of trailheads much simpler and open up a lot of possibilities. It can simplify getting to grocery stores or to an out of the way BNB or just about anywhere. Virtually everywhere in the Swiss Alps will have spectacular scenery and great hiking. Consider hiking to a "hut" (really mountain lodge) which will usually have great food before you head back down the mountain. The Toggenburg (Wildhaus, Krummenau) area of Switzerland is gorgeous too. You can usually take a ski lift half-way up the mountain to cut down on some of the initial elevation gain if you prefer. The Komoot app can be used in hike planning. The Interlaken/Lauterbrunnen area is beautiful too.