I'm planning to purchase the 5 day German rail pass but I wasn't sure if the German rail pass would cover the trip from Paris to Munich (via city night line). Or should I purchase the ticket from Paris to Munich (plus cochette) separately from the rail pass? I'm really confused. Thanks!
Why are you considering a rail pass?
The answer is no. It covers only the part within Germany.
You were asked why you are planning to buy a German railpass because 9 times out of 10 a multi-day railpass is not a good value compared with other options (area daypasses and regular tickets purchased in advance.) It's easy to get information about railpasses because the middle men who sell them advertise heavily; it's harder to learn about these other options, but share your itinerary here, and you will get some help.
If you choose to go from Paris-Munich with the CNL (I've done that ), get a point to point ticket covering Paris to the border. The German Pass will cover the rest of the distance to Munich. Now, paying for a couchette is extra, not worth the expense in my view. Sitting in a six person compartment is the cheapest option.
I know the CNL arrives in Munich shortly after 0700. If you have more time, I would suggest another route so as to avoid the night train, in case you prefer that. ( Going by night train I have no problems with.). By day I would suggest the early ICE Paris Est-Frankfurt Hbf. direct, which you cover the French portion with a p-p ticket Paris-Saarbrücken. After Saarbrücken use the Pass in Germany. Then in Frankfurt change to Munich an ICE direct.
A second class German Rail pass costs 15€ more for five days rather than for four. I don't know that you can get a ticket for Paris to the German border. I think it has to be to the first station where the CNL train stops, which would be Stuttgart. That ticket would cost 116,10€ for a standard fare ticket. On top of that, you would have to pay the surcharge for you accommodations, for example 27,50€ for a bunk in a six person couchette. That's 158,60 total. The standard fare from German Rail for the same bunk is 131,60€. If you use advance purchase Savings tickets, it would be 101€ with a railpass, 89€ for just the ticket.
Even if they would allow you to buy a ticket from Paris to the German border, it would have to be for at least the same class of train as the night train, which is an IC. There are no ICs from Paris to the German border on that route, so it looks like you need a ticket for a TGV to Karlsruhe. That would save you about 14€ on the standard fare or 4,50€ on the Saving fare, not enough to make the rail pass less.
If you can commit to specific departure dates and times, discount point-to-point tickets for long-distance trains will be cheaper than a rail pass. For example, booking up to 92 days in advance can get you Europa-Spezial Frankreich fares on the Paris-Munich CNL night train of €59.00 for a bunk in a 6-person couchette and €69.00 for a bunk in a 4-person couchette. Or you can get a fare of €49.00 for a fast daytime route (Paris-Stuttgart on a TGV and Stuttgart-Munich on an ICE). Book either the CNL train or daytime trains on the German Rail site.
For rides on regional trains within a specific Land (state), buy a Laender ticket for that state and ride all day for one low price. For example, a Bayern-Ticket costs €23.00 for one person and €4.00 for each additional person up to a total of five riders. It's good throughout Bavaria and also covers the S-Bahn, U-Bahn, and buses in Munich on the day you use it. No need to buy these tickets in advance.