My first choice would be Oberammergau, between Füssen and Garmisch-Partenkirchen. It has a train station, but the rail line intersects the Munich-GaPa (Garmisch-Partenkirchen) line to the north, in Murnau, so it's a little bit of a roundabout to go by train to GaPa. There is no reason at all to need a car there; public transportation is very good.
There are regular buses from Oberammergau to the GaPa Bahnhof (next to the Zugspitzebahn) in about 40 minute. From GaPa there are trains to Mittenwald or Reutte.
You can also go by bus from GaPa to Kochelsee on a beautiful route going along Walchensee.
You can also go from Oberammergau to Hohenschwangau (castles) by bus in less than an hour and a half.
There are buses to Linderhof in about 15 minutes.
As a place to stay in Oberammergau, I would recommend Gästehaus Richter. It's very close to the train/bus station. Paula Richter speak very good English (a lot of people from the NATO base stay there), and the price is very good for Oberammergau.
When I stayed there in 2007, I had no problem finding restaurants in town; there were lots. Because I was staying in a Gästehaus and eating in restaurants, I had no need to find grocery stores. I'm not interested in shopping, but there are lots of shops in town selling wood carvings.
Oberammergau is the epitome of charm.