Help with planning

I think your idea of spending more time in Salzburg is good since you have two children. I’m not sure if they would enjoy more than one castle. There are more things to interest them in Salzburg and it’s barely a two hour trip.
How long do you plan on traveling?

I think a couple of Christmas markets would be enough for the kids.

In Salzburg do the salt mine tour in Hallein.

For castles, Neuswanstein would be my choice, but realize it is a lengthy day trip from Munich.. maybe the fortress in Salzburg would be enough

"Our family with a 7yo and 10yo will be visiting Munich (day trip to Nuremberg) and Berlin."

If you were to do only this much, I think you would probably need 8-9 days. But it seems you have other intentions with Salzburg, Heidelberg, and the alpine palaces. It's hard to make suggestions without knowing how much time you have or what you are interested in most.

"Can there be too many palaces and Christmas markets such that there’s very little magic after visiting 2-3 of such?"

I think you are asking a very good question - Germany offers much more to families beyond these things.

"Should Heidelberg then become a day trip from Munich?"

This would be an undesirable day trip. 3 hours each way = 6 hours of train travel??

"If we were to travel from Salzburg to Munich, any suggestions to break up the trip? I’m not sure how the kids would take to the 6-7h train ride, even though we’ve done 14h flights."

Salzburg > Munich requires just under two hours. As for "activities/esploring" in Salzburg, winter weather is a serious constraint in the Alps. There won't be much of that.

Not knowing your which airports you plan to use or how much time you have, here are a few thoughts and a couple of family/kid suggestions for you.

1) Christmas markets are literally EVERYWHERE. It's not necessary to spend a lot of time traveling far and wide around the country if your purpose is to visit the markets. If Heidelberg interests you... you should know that there are roughly 380 Christmas markets just in the German state of Baden-Württemberg (where Heidelberg is located) that you could visit. 51 of them are highlighted at the state's tourism website:

https://www.visit-bw.com/en/events/calendar-christmas-markets-in-southwest-germany

2) Extensive travel is also unnecessary for visiting castles and palaces. Sticking with Heidelberg as an example for now... You probably know about the palace there, but are you aware of the others in the vicinity? The choices are dizzying:

https://www.schloesser-und-gaerten.de/en/

3) You are concerned about long train rides. Rather than traveling the whole country, You could just focus on one area. Get a map, then draw a circle around the airport you plan to use using a radius of, say, 100 - 125 miles. See what turns up. Local train travel for families can be VERY cheap, and booking is often unnecessary. Again, sticking with Heidelberg as the example... FRA is probably the best major airport for Heidelberg. Within the radius given, you will have no problem at all getting around on shorter rides and you will have extensive sightseeing / activity options. A few examples in addition to Heidelberg...

COLOGNE:
- The Cologne Cathedral (Germany's most-visited landmark)
- WW II-era history at the NS Documentation Center
- Museums

STUTTGART:
- Palaces: https://www.schloesser-und-gaerten.de/en/about-us/our-regions/royal-sights-from-around-the-swabian-metropolis
- Auto Museums (Mercedes-Benz, Porsche)
- Old-world town of Esslingen, 10 minutes from Stuttgart + Medieval Christmas Market

SPEYER:
- Christmas Market open AFTER CHRISTMAS
- Romanesque Cathedral
- Technik-Museum: OPEN on CHRISTMAS DAY: https://speyer.technik-museum.de/en/exhibition

WUERZBURG:
- Castles, Palaces, more:
https://www.wuerzburg.de/media/www.wuerzburg.de/org/med_18766/595349_artentertainment_en_2026.pdf
https://www.wuerzburg.de/media/www.wuerzburg.de/org/med_18766/595345_tourstastings_en_2026.pdf

RUEDESHEIM:
- Very popular small old-world wine town on the Rhine River, close to FRA.
- Atmospheric Christmas market: https://www.youtube.com/watch?v=eDMc5L0FkMc

ALTERNATIVELY, do the same sort of search-within-a-given-radius for MUC airport. That will not turn up Heidelberg, etc. But it will turn up Nuremberg, Regensburg. Augsburg and many other nice places to investigate.

A train from Munich to Heidelberg takes three hours, this is way too long for a day trip from Munich: https://int.bahn.de/en/. A train from Munich to Salzburg takes two hours, making Salzburg a day trip from Munich.
Traveling by train from Munich to Füssen (Neuschwanstein and Hohenschwangau castles) requires a transfer and takes approximately three hours. A direct bus from Munich to Füssen takes two hours.
According to Rick Steves, Neuschwanstein is a “fairy-tale” castle and Hohenschwangau is “historic”. According to AI, the Herrenchiemsee Palace is less storybook than Neuschwanstein and Hohenschwangau.

Can there be too many palaces and Christmas markets that there’s very
little magic after visiting 2-3?

Palaces can be overwhelming for a six-year-old if it lacks engagement and is fast-paced. Both Neuschwanstein and Hohenschwangau offer outside activities that will entertain your child rather than being indoors.
Christmas markets are dedicated to children entertainment, visual magic and meeting Santa. If your child is well-rested and you arrive before the crowds, limit your stay to one to two hours, dress them in layers and provide themed snacks for a more enjoyable experience.

Thank you everyone for your suggestions so far! I’ve edited my original post to add that we plan to travel 14 days in late December, and I had meant to write “travel from Salzburg to Berlin”, not Munich.

The plan is to arrive in Munich and leave from Berlin, but flights have not been booked because I am uncertain of my itinerary so far. So glad I’m asking the hive.

When I’d first thought of Germany as a destination, it was simply about Christmas markets and, visiting Munich and Berlin (cos it sounds/is cool), and then planning whatever I could fit in between. This was how I had derived at day trips from Munich, which later expanded to 2D1N in Heidelberg or Salzburg. Further reading led to hesitation about the numerous Christmas markets. My apprehension also stems from not wanting to hotel-hop too much.

Yes, I am undecided about visiting Füssen (Neuschwanstein and Hohenschwangau castles) because
- long commute
- long and cold hike up because buses and horse-drawn carriages don’t operate in December, from what I’ve read
- bridge is likely closed
- but I think my daughter would appreciate
- although kids being kids, they would probably be awed for 2min and get on with life.

Christmas closures from 24-26 Dec are also a question mark. Not forgetting the cold, short days in December.

I would absolutely include the St. Wolfgang / Strobl / St. Gilgen Christmas markets to that trip. Hands down magical even after the Munich and/or Berlin markets. Worth the trip and maybe even worth renting a car for two days.

Agree that too many hotel changes with a young family is a challenge and it's a long train ride from Munich to Berlin.

So, after Munich and Salzburg, consider a night or two in Nuremberg. This will cut the ride to Berlin (from Nuremberg) by about a third. Also, DB has family cars/compartments on some of their trains. No idea as to how to find them and book them as I don't travel with children.

Have a great time.