Dolomites loop advice

If you want to do a day hike most skills levels can do you will remember forever, the Tre Cime loop I am not sure can be beat and is not far from Cortina.
Serious hikers would probably consider the loop a walk in the park but those types probably aren't on RS forum looking for advise.
I would stay in Cortina or if not in town somewhere close to the Tre Cime so you can get there early in the morning to start your day, it will be a very crowded place so the earlier the better. If you are more adventurous you could stay in a rifugio along the Tre Cime route, there are at least 3 of them.
Alpe Di Suisi / Ortisei area is better for staying there a few days, not really just for those passing through on a driving loop.

With a full day at Tre Cime you would not have time for much else with a 2 night stay in the area, drive the mountain passes the other half day you would have. Just look at google maps, it is very easy to see and define a circular route that you think works within your timeframe. Gardena Pass, Selva Pass, Pordoi Pass, Giau Pass are the top 4 I would say.
At each pass there is some type of place to get out of the car, look around, stretch, get something to eat, etc...
I personally did not find the mountain pass driving as enjoyable as I thought I would and my wife hated them ; I know others love them so don't go by my experience alone.

Thanks mreynolds. I had not heard about Tre Cime, but it looks like a fantastic, spectacular destination on the east side of the Dolomites. I get the impression you need to get their early due to crowds. We could potentially take the train to venice, rent from a rental company at Piazzale Roma, drive to the Cortina area and stay 2 nights, hitting Tre Cime between nights. Thanks for the suggestion.

We stayed in Ortisei and did the Alpe di Siuse hike one day. It was about 12 miles and was nice because there are several places to stop for lunch. The scenery was gorgeous and we really enjoyed it.

Yes, I am still trying to decide between staying in Ortisei or Cortina. A lot of people recommend Ortisei. Its about a 7 hour driving loop from Verona to Venice via Ortisei/Cortina, and roughly the same driving time going Venice/Cortina/Tre Cime/Venice.

Question on rental car, is the CDW required in Italy? Rental car reservation sites ask you to purchase it for about $11 a day. If required, is it cheaper to purchase during reservation or at the desk? I do have a Chase Sapphire Reserve credit card that does have primary auto insurance coverage.

Steve,
Ortisei is nice because you can access hikes on both sides that start by taking a lift.
These are easier hikes since the hard work is done via cable car.

I think a far more impressive single hike is the Tre Cime loop. You did ask for an epic hike with teenagers, not sure I would call Alpe Di Suisi an epic hike. You drive up a good way so the hike is not vertical or technical but definitely more than a stroll on the alpine plateau that is Alpe Di Suisi. Alpe Di Suisi while not epic is definitely beautiful, peaceful, rewarding, natural, scenic, etc...
Really depends what you want, Tre Cime is say rated medium and Alpe Di Suisi is easy.
Tre Cime is likely to be more crowded on weekends which is a negative so if over a weekend Ortisei maybe better.
The other side of Ortisei is Seceda which is has an Epic view and a cable car goes right up to the top, where you can hike around but since you are at the top you get the views without hiking and there is not a ton of hiking on this side unless you want to walk down the mountain or get technical on peaks.

For your original post and with only 1 or 2 night stay ; Tre Cime hike is more epic without being dangerous so would stay in Cortina or somewhere on that side even though my preference on town to stay in would be Ortisei.

As far as insurance, basic insurance is included which will have a rather high deductible, maybe 1000 euro.
If you have the Chase Sapphire Preferred or Reserve it is your call if you think adding the Super CDW to make that deductible zero or not it is not required.
It will surely cost you more at the counter so either add it now or don't add it at all.
Keep in mind if you don't add it that 1000 euro will go as a hold on your card until you return the card so does affect your credit line, probably not a big deal ; and anything at all happens you pay for it on your credit card up to 1000 euro max and then have to get the paperwork and file a claim with Chase or Chase's agent. All the paperwork is on you to get reimbursed from Chase, the rental company does not deal with Chase you do.
The minor potential caveat is that Chase could in theory deny any claim since you did not decline all insurances at the rental (Italy requires and gives free of charge basic insurances which cannot be refused) ; I seriously doubt this would happen but if you read the fine print it could.

Alternatively if you buy the extra cost CDW which makes the deductible zero you don't have to worry about any hold on your credit card, can return the car without documenting things and worrying about any paperwork or time post trip should something happen.
Your call.
I have done it both ways and also have the CSP card. Never had a claim or any damage either time so cannot speak to any claim process. If only renting for a couple of days I would add it personally just for convenience since it wouldn't cost much to do so.