Need itinerary help for a family of 5 traveling in August 2018

I agree with you that it is nice to have a car between Fussen and Salzburg / Hallstatt. If it were me I would add a night to Fussen and take it from Hallstatt. Try and make it to the Erhenberg ruins. It's a great place for children to explore and climb! When we took our 11 year old we stayed in Pinswang for 2 nights - explored Neuschwanstein one day and Erhenberg the other. I would then go to Halstatt first so that you could return your rental in Salzburg where you won't need it. Take a day with the car to explore some of the other small towns / lakes before returning car.

Overall, you are covering a lot of ground in a short amount of time, but I think it's doable. There are many other great places in Germany you could go and not spend so much time traveling. Just food for thought.

Jill- We are still open to some changes. Do you have specific recommendations for young kids? It sounds like you've made this trip with an 11 year old so I would be interested to know what you all liked in the area. Thanks again. Sara

"Also, should we drop Prague to do more exploring near Garmich etc? I've been reading the guidebooks but have so many ideas bouncing around and am not sure of a route that is feasible and good for kids."

We don't know your kids, but generally speaking, it looks like there's very little built into your plan for typical kids that age. You have a lot of time in large cities that are primarily for adult visitors. Hallstatt is small but IME mostly for the elderly visitor. Some further suggestions:

Near Salzburg:
ice cave: http://www.eisriesenwelt.at/en/
castle w/ falconry show: https://www.salzburg-burgen.at/en/hohenwerfen-castle/plan-visit/openinghours/

Near Berchtesgaden:
Hochlenzer summer bobsled at the inn/restraurant of the same name - http://www.hochlenzer.de/slideshow/images/3.jpg and https://www.youtube.com/watch?v=0Mgfl8-ysf0
water fun - http://www.watzmann-therme.de/en/areas/water-area/ - and a natural pool in Bischofswiesen - https://www.bergbach24.de/en/thermal-baths/nature-baths-aschauerweiher.html

Between Salzburg and Munich in Prien: Lake Chiemsee, Herrenchiemsee Island and Palace:
http://www.ferienhaus-am-chiemsee.com/files/template/background.jpg
https://www.tripadvisor.com/Attraction_Review-g651804-d1901726-Reviews-Chiemsee_Schifffahrt-Prien_am_Chiemsee_Upper_Bavaria_Bavaria.html
http://www.schloesser.bayern.de/englisch/palace/objects/hch_ns.htm

Near Prien (in nearby Aschau) - mountain lift for views and some walking:
http://www.bayern.by/data/mediadb/cms_pictures/%7Bbcf4b563-5769-1485-2747-fafba2b773d4%7D.jpeg
https://kampenwand.de/index.php?rex_resize=835h__panoramakarte_sommer.jpg
http://q-ec.bstatic.com/images/hotel/840x460/439/43953086.jpg

With your family, you might wish to consider a agritourismo option. In Austria, S of Salzburg, there are many ski chalets that let out rooms during the summer. We stayed in one near Altmarkt. It was quite nice. We had it pretty much to ourselves, and it was not expensive. The kids (mine were 21 21 24) loved the chickens, cats, and animals. We were close to Eisreisenweldt (ice cave) and a castle with a falconry and daily falcon demonstrations. We did have a car. With 5, a car is much the best idea. We started in Austria and ended in Austria, thus no drop off charge. For your smaller persons, you need to tailor some of the trip to them. There is the Prader in Vienna (old amusement park). Personally, I am not fond of 1 night stops - with the kids, especially, you will be herding the herd a lot and getting them to pack up and try to make the train, etc. Not relaxing. Hallstadt is not really big. It is a tiny town of 500-600, and I wonder if there is a full day there. It can easily be done as a day trip from Salzburg. In Salzburg, we stayed in a nice hostel, Hostel Jufa - nice breakfast (big room, lots of kids there, inexpensive). We had a private room with private bath, 4 blks from main square. There is a nice beer garden in Salzburg, again a lot of kids, some outside seating next to a park (run-around room).

What Paul said. We based in Mondsee (20 minutes east of Salzburg) for a week to see Salzburg and tour the Salzkammergut lakes, towns, etc. Hallstatt was an easy 1-day road trip. With an early start, we were parked and walking the town before it got crowded (September 2017). We had time for lunch, the boat ride to/from the RR station across the lake (to enjoy the view of Hallstatt from the water), and the funicular up to the spectacular World Heritage Skywalk for views and beverages: https://dachstein.salzkammergut.at/en/hiking/austria/poi/430011864/hallstatt-sky-walk-the-world-heritage-view.html We were back to Mondsee by dinner time. The drive in/out of Hallstatt is worthwhile in its own right.

I'd recommend making the excursion to Hallstatt from Salzburg if only to eliminate a hotel/check-in/check-out event. We covered the stops in your itinerary (except Munich) by car; I think you'll appreciate the flexibility and efficiency vs. public transport.

I question the 4-hour drive or train trip to Prague (not counting corralling the kids, hotel check-out, navigating to new hotel, etc.), which means you'll have only one day and some hours there. Certainly it's doable and the city is gorgeous, but for me more time in fewer places would be better.

You don't mention flight plans. Have you checked fares? From some origins Munich is a lot cheaper than Prague. And for not much more than one day...