"With a toddler, I would opt for 3 or 4 bases. Less is more."
The general consensus here, that you need to slow down, should be heeded. And Jennifer's suggestion is spot on. Try to cut the number of base towns in half... 5, max. That will cut your travel "deadlines" in half, allowing you two to make day-to-day activity/sightseeing/daytrip choices based on conditions on the ground.
"Any suggestions which places to go from Nuremberg instead of Rothenburg?" N'berg is a good base town if you want to be in a large city. Possible day trips include...
Munich (not the whole city of course, but maybe a few sights that you care about - a palace like Nymphenburg, or an auto museum, or?)
So let's just say you book one week in Nuremberg. If you stay there 7 nights, you have 6 towns/cities to choose from (including Rothenburg) and some genuine flexibility. A fair-weather day would be a good day for a Bad Windsheim outing. On a rainy day, maybe you visit Bamberg or see a museum or two in Nuremberg. On a fussy-kid day, well, you know best. You can adjust your sightseeing according to your interests, energy levels, etc. without the tyranny of a strict itinerary.
Understand that Nuremberg isn't your only base town option. You might find a nice vacation rental in a smaller place like Iphofen or Bad Windsheim more attractive. Accommodation costs and parking/driving conditions in smaller towns can be most advantageous.
How do you decide which base towns to book? Hard to advise you. It's not exactly clear to me what interests you have or what you want out of your trip to Germany.
"I haven't thought of Oktoberfest, I always wanted to go and from what I read there are also many children during oktoberfest? I might look into airbnb"
High prices have been mentioned - and room/rental availability is also problematic. In certain major cities like Munich and Berlin, vacation rentals like those offered by airbnb have been heavily restricted year-round by local ordinances in an effort to keep the local housing supply available to locals. You can read about this issue here. This might be motivation for you to look for short-term apartment rentals in smaller towns where housing pressures are fewer.