Trains in Germany/help with itinerary

I think you got it right (concerning train travel). Only question about that part: Which Lutherstadt? There are two towns with that attribute, Lutherstadt Eisleben and Lutherstadt Wittenberg.
Concerning accomodation: There are a couple of events in Berlin in September - depending on your precise dates, hotel prices may go up considerably (while Berlin is usually quite cheap, compared to other major cities in Europe). You should keep an eye on hotel prices at least a couple of weeks out. In Munich, Oktoberfest starts late in September (I avoid Munich at this time of the year). If you want to be in Munich for Oktoberfest, I suggest to start checking prices now.
Concerning Erfurt/Eisenach: No matter where you spend the night, I think you should see Erfurt. It is a lovely city.

Munich to Dachau is on the S bahn and is local/cheap so don't worry about that in particular.

I believe that the the rail pass is a great deal if you want the flexibility. 200 Euro total for flexible 7 days travel versus 30-50 Euros per trip.

"Making the travels better" is tough call since you have pretty detailed itinerary already. Maybe the next step is to make a formal itinerary list with train routes selected town to town (plus finding needed train changes), and to research hotel options. Although I usually prefer to book hotels directly as RS recommends, doing the research on Booking.com and compiling what is available, where, and for how much, is a great way to start nailing things down. When we travel I break each day up into AM, PM, and Evening blocks and fill in travel segments, segments at particular sites, festivals, etc. This helps identify AM or PM travel needs depending on opening times/closing times/distances, and so on. Of course, things will move around within your schedule, but once the hotels are picked (unless you get the cancellation option) you are pretty much going where you said.

September is not too far away to start making somewhat "detailed" plans. If you do most of the homework now, you can put it aside and think about it some more before committing to anything. By two months out you will probably want to start making definite decisions, not because things won't be available later, but because selections/prices may start changing for the worse in popular places.

Thanks for the help. I appreciate it! I’m planning on Lutherstadt Wittenberg. We also are avoiding Oktoberfest. Seems like either it’s too soon to book in Berlin or there’s something going on (Sept 8-12) as hotel prices are a bit high.

Where do I get the German rail pass? The DB site, correct? But I’m seeing much higher prices than 200 Euro for 7 days??

It is 416 EUR for a 7 day 2nd class Twin, so per person it is 208 EUR.
But with Super Sparpreis tickets bought now and Laender tickets, could be substantially less.

Munich-Berlin 60 EUR for 2.
Berlin-Wittenberg L'sdt(6 to 8 hour stopover)-Erfurt 60 EUR for 2.
Erfurt-Eisenach-Erfurt 32 EUR for 2 with a Thueringen Ticket. That will include bus ticket to/from Wartburg.
Erfurt-Augsburg 40 EUR for 2
Augsburg-Fuessen-Augsburg 32 EUR for 2 with Bayern Ticket. That will include bus ticket to/from Neuschwan.
Augsburg-Munich 32 EUR for 2 with Bayern Ticket (use for Munich transport remainder of the day).

That is 256 EUR for 2. Flexibility has its price.

Hmm, okay. I’m seeing Munich to Berlin closer to 107 Euro for the date I need it. Maybe because it’s a Sunday? I don’t think I can do the Berlin to Lutherstadt to Erfurt because of our luggage. I read somewhere that Wittenberg HBF no longer has luggage lockers (are they even big enough normally for large checked bags?).

Yes, Sunday tickets are higher, at least Sept 1 and 8.

I do see that, although DB shows luggage lockers are there, they may be in limited supply. A day trip from Berlin can be done with a Brandenburg-Berlin Ticket for 29 EUR. I guese I'd email the tourist board and ask about luggage storage. I have stored bags at Tourist offices in Germany (gratis) when lockers were in short supply. Anyway confirm with tourist board.

I would still use Laender tickets for some trips because all public transportation for the day is included. If you go with a GRP, maybe a 3, 4, or 5 day at the most.

Looks like something is going on in Berlin the night we are trying to arrive (Sept 8) as hotel prices seem higher than usual and even the train ticket is much more (MUC-BER). :/

A quick question: One day we'd like to go from Berlin to Wartburg Castle. I was thinking we would head first to Erfurt (where we would like to stay overnight) and drop off our bags then head from Erfurt to Eisenach and back to Eisenach. It looks like I have to buy a train ticket from Berlin to Erfurt ($67ish) and then buy a Thuringen pass to do the next trip. Is that right? I don't want to do the slower trains from Berlin to Erfurt as that adds a lot of time and we need to get to the hotel, see castle, etc. There isn't day pass though that looks like it works for all 3 places.

Looks like something is going on in Berlin the night we are trying to
arrive

It is IFA trade fair - one of the largest for consumer electronics in Europe.
https://b2c.ifa-berlin.de/

On top Lollapalooza Festival.

Also preparations for Berlin art week, starting Sept 11.

So, besides NYE you have chosen the most expensive weekend.