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Luxembourg, anyone?

Since there is no Luxembourg forum, and the few posts that refer to it on the Belgium forum are very sparse, can anyone suggest some highlights for a Lux City daytrip from Germany? The castle seems obvious, as well as wandering the old town. Any specific charming yet casual restaurants (outdoor seating/ view a plus)?

Additionally, what is the cheapest way to travel there by rail on a Saturday or Sunday? I will have the VRM regional day pass, but will have to purchase separate round trip tickets for the Bullay to Lux City portion, which DieBahn prices at 58 Euro! Are there still "Happy Weekend" tickets for slow trains that I could use here?

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We have not done this yet. Our trip is in June but our relatives near Trier say that in many cases, the simplest and cheapest transportation around Luxembourg area may be by bus, not train.