You might consider the Christmas market in Augsburg. I attended this market for a day in the early '90s. It is not huge but very special. At the time there were live "angels" that came out on platforms high on the town hall at scheduled times with music accompaniment. I think this continues to take place but I would check with the tourist office. It was a short train ride from Munich.
Side story--Actually we (four of us) were to drive to Augsburg but we did not read the parking garage sign in Munich carefully enough and when we left our hotel in Munich on a Sunday morning, walked a few blocks to the parking garage where we'd left our car and realized the parking garage was closed on that Sunday morning. So we walked to the train station and took the train. We took a taxi to our hotel in Augsburg, toured the Christmas market and on Monday returned to Munich to get our car (and pay an for an extra day of parking). Won't happen again. Since the late '90s we always take public transportation. And took a semester of German and my husband took three semesters : )
Have a wonderful trip. Happy planning!
Traveler Girl