"Planning this trip has proved to be overwhelming with all the possibilities of places to go."
Your main problem, as Lubitsch has pointed out...
...you're covering too much ground, your destinations are all just a
tad too far away from each other...
... is the reason for my two-base-town suggestion above. You have predetermined an end-destination (Cologne) that is several hundred miles from MUC, a distance you MUST travel. You have 8 days for sightseeing - well, less, really, as Day 1 is probably going to be compromised (security and luggage lines, airport transfer, possible flight delay, jet-lag/drowsiness.) The way to maximize your boots-on-the-ground time in Germany is to minimize the total number of ground miles and to minimize the number of times you have to pack up, move, and unpack - and that is the logic I've used - hit the places on your list that lie in between MUC and Cologne, and include some other really great places. (It's nothing to do with grouchiness - I'd hand the above plan to my best friend.)
"the areas that we really want to see... are: Munich, the Alps, Bavarian villages, and the Rhine area."
Iphofen, Rothenburg, and Marktbreit are all Bavarian villages. (Bamberg, Würzburg and Nuremberg are Bavarian cities of differing size. Bamberg (like Regensburg, which Lubitsch suggests) has an authentic medieval old town core with UNESCO World Heritage status.)
If Munich and the Alps are each worth a day in your schedule and the extra miles... You can try to make it work by subtracting one night from each base of my two-base plan... so 3 nights on the Rhine, 2 nights in the Rothenburg region... Spend those 2 saved nights in Munich. See what you can of Munich in one day, then spend a 2nd day on an outing to the Alps. Salzburg isn't in the Alps. But you can reach Mittenwald in 1:51 by direct train from Munich's main station. Mittenwald is really in the Alps.
http://requisitosparavisa.com/wp-content/uploads/2015/09/mittenwald_-3.jpg
http://www.raoul-kieffer.net/Mittenwald-(500)-Geigenbaumuseum.jpg
This guide to Mittenwald should help you spend your time there wisely.