Germany Neuschwanstein Castle..to tour or not to tour? and suggestions for Bavaria

You need to fill in some blanks. Are you flying into Munich from the US? When you say 7 days is that 7 nights? If you are not flying into Munich, where will you be coming from?

The reason for the questions is if you are flying into Munich, you will lose a day from your overseas flight. Now you are down to six. The drive to Frankfurt will eat a full day with the trip, car return and settling into your hotel leaving you with 5. 2 days in Munich barely will scratch the surface of Munich.

I would stay in Munich 3 days and drive to Rothenberg. Spend a day and evening in Rothenberg and continue on to Frankfurt.

I will be coming from Italy so I won't lose a day on this leg but I arrive the morning of July 1st and fly out of Frankfurt evening of July 7 so 6 nights.
My penciled itinerary is:
Munich 2 nights, Regensburg 1 night, Rothenburg 1 night, Hinterzarten 1 night, Wiesbaden 1 night

"I would like to see the Neuschwanstein castle... My concerns are parking, language barriers and summer tourist congestion."

Heh. I would stay away from Neuschwanstein and Rothenburg if you want to avoid summer tourist congestion. And a car in Munich won't be very helpful. If your plan was to spend a day going to Neuschwanstein as part of your 2-nite Munich stay, well that doesn't leave much time for Munich - so I assume you don't have much specific planned for Munich. Keep in mind that N'stein is no castle, rather a late 19th-century palatial residence with a faux castle exterior.

It sounds to me like you might be FLYING from Italy to MUC on the morning of July 1 - is this correct? And it sounds like you know that you want to drive.

"I'd love some suggestions on places that are a MUST SEE."

And it sounds like you aren't quite sure what you want to do otherwise.

So if you're picking up the car at MUC airport, there's no "must" that you drive into Munich. Here's what I'd suggest... From MUC airport, you're not far from Regensburg, one of Germany's most important old-world cities. Why not just go there? You could continue northwest from there in the general direction of Frankfurt to Bamberg, another outstanding town that was mostly spared the ravages of WW II. Bamberg is an absolute beer Mecca where you can soak up some Franconian culture. Nearby is Coburg Castle with a millenium of history behind it. Also near Bamberg are Nuremberg (outstanding city) and Iphofen, a fine old walled town without the crazy tourism of Rothenburg. Further in the direction of Frankfurt you could visit and/or stay over in Würzburg and/or Miltenberg, both interesting towns on a scenic section of the Main River (a robust wine region.)

If that doesn't take up all your time, you could do some driving in the Middle Rhine Valley as well, just northwest of Frankfurt, prior to flying out. Like Regensburg and Bamberg, the MRV is a UNESCO World Heritage site - and it's stuffed with castles and attractive old-world towns left and right along the Rhine river (focus on the Bingen - to - Koblenz segment.) Marksburg is an intact medieval castle with tours in English at 1 and 4 pm.

Germans tend to speak more and better English than the average Californian, IME, and better than most other European countries as well. You'll do OK there - but since you'll be driving, bone up on the German-language signage and driving customs.

https://www.german-way.com/travel-and-tourism/driving-in-europe/driving/

Are you arriving in Munich by train or plane - or are you driving the car from Italy that you will later leave in Frankfurt am Main?