Hi, Brett. Welcome to the forum.
"- What to do in those areas"
This is probably something for the two of you to figure out independently - and probably even before you decide on the towns and cities in your itinerary (why go someplace if what you want to do isn't there?) There are dozens of great resources you can use to inform yourselves, and you have lots of time to plan. In addition to the R. Steves materials, grab some guidebooks from the library or a bookstore and head to Tripadvisor and the other online compendiums of travel information to read up on the options. Maybe you have specific personal interests... the German automobile industry? Architecture? Winemaking? Medieval history? A forum like this can be good for feedback once you have specifics in mind, but a general question like yours will likely produce a scattered and unfocused set of personal responses that probably don't fit you.
7 nights = closer to 6 days since Day 1 is always compromised. This isn't much time. I would focus on fewer overnight destinations.
"- Train vs rental car"
"- When to buy train tickets"
The car is a poor option for big cities like Nuremberg and Munich. A car is possible but not necessary for most smaller towns - trains go nearly everywhere. Get your activities and your destinations pinned down before the transport decision. The towns and cities you mention in your post are all well connected by rail. Any towns without a rail station are normally reachable with a short bus connection. A long-distance trip like Bacharach - Nuremberg might call for an advance-sale "saver fare" ticket from DB if you want a bargain price. The other trips you mention would probably be best using local tickets and day passes (like the Bayern Ticket) bought on the day of travel from a ticket machine. Anyway, don't sweat any of this until you have a firm itinerary.
"- Train to Bavaria/Tirol staying in Fussen (2 nights)"
From Munich? Munich is already in Bavaria. So is Nuremberg for that matter. I am certain you plucked this wording from Rick's materials somewhere. But it's just wrong. Traveling "from Munich to Bavaria" is just as geographically goofy as traveling from Philadelphia to Pennsylvania - so do take my advice on using additional guidebook sources!
Map of Bavaria, with train lines