I've spent 11 nights on night train in this country and in Europe, most recently from Reno to Denver on the Zephyr. I've never had a bad night, but maybe that's just me. The first 10 nights were in a single compartment, the last one was double with my partner. The "worst" night was on a train from Brussels to Heidelberg back before the Chunnel was operating. The train waited for ferries from England that were delayed by storms in the Channel and was 3 hours late leaving Brussels. I naively thought the train would make up the time and set my alarm clock to wake up before getting to Heidelberg, but instead woke up in Koblenz.
So, based on my experience, I would try it.
I wouldn't fly. I will take almost an hour to get to the Munich airport from downtown. If you check in 2 hours before flight time, it will be three hours from downtown. Add an hour for the flight, half and hour to deplane and find ground transportation, then half an hour to get to Venice, and you'll have at least 5 hour expended. The cheapest one hour flight on Expedia, booked two months out, is about $385 for two people, not including ground transportation, and that flight leaves MUC at 8 AM, so you'll have to leave downtown Munich at 5 AM. Later flights are more.
Instead of flying, there is a non-stop EuroCity train leaving Munich at 1138, getting into Venice at 1810 (6:10 PM). With advance reservation, which you would need anyway to fly, two people can ride that train for 78€ ($87). Even without advance reservations, it about the same cost as flying.
I'd much rather spend my day looking at the alpine scenery over Brenner Pass than the inside of airports.
"There's nonstop flights that are 1 hour long, starting at about $33 on the random April date I checked."
That doesn't include ground transportation, about 40€ for two people, or any checked luggage.