Small town German New Years

That's a tall order in small towns unless you belong to a club or organization.

One option comes to mind - a NYE two-hour evening dinner/party boat on the Rhine River that leaves from the small town of Rüdesheim or from Bingen across the river and includes a fireworks show.

https://shop.bingen-ruedesheimer.net/en/themenfahrten

Never done such a thing myself.

How small a town? My town of @ 7000 residents will be launching fireworks from 10pm through 2am, and that's not abnormal. but these are not professional shows, just people shooting off what the picked up at the supermarkets. The pubs usually close down around 1am, and they're crowded until after midnight. This is pretty much the same in the other places I've lived in Germany. But getting a table is pretty much a local thing, and it's usually friends, good customers, etc. We do have a couple Gasthouses, so I expect there are some tourists in town, but not enough to notice.

You should know it's usually quite cold, occasionally snowing, and not especially spectacular.

My German friends who like to party all head for the big cities, Amsterdam and Cologne are favorites. Mainz, Frankfurt, Landau, Koblenz, Trier, all these cities around the Rhineland will have major fireworks and parties. But another option we have is to go to one of the castles on the east side of the Pfalz forest, where it looks out over the vineyards, and (if it's clear) you can see the fireworks from all over the valley. Someplace like this https://hambacher-schloss.de/.

The parties are just starting to be advertised, Google "Silvester Parties" https://silvester.in/silvesterparties

My small town (pop. 12,000) has several parties in restaurants and a big gala dinner show from 7pm till 2 am with live music, dancing, food and drinks in the city hall (cultural centre). Quite common, I'd say.