Need Help With Itinerary

Some of the areas I have been others I am going to this year on our 3rd trip to italy so not an expert on your plan but have a few comments:
Day 1: Pick up car in Rome, stop to see Orvieto; move on to Montepulciano. Stay 2 nights.
You are flying on this day from the US and arriving in Rome. If so way too much for your first day you will be tired, jet lagged and on a big time difference. Maybe try to rent the car in Orvieto and pick it up day two, use day 1 to get from the airport to Orvieto by train and see some of the town.

Day 5: drop car in Florence (I've heard Florence Airport is easiest to drop...quick and easy to get from the airport into Florence center? Any options to drop bags for a few hours?) and see Florence in a flash (more interest in smaller towns/villages)-head to Cinque Terre in afternoon (2 nights in CT)
This day sounds really pushing it. It is not going to be that easy to drive to the Florence airport, drop off rental car, get into Florence with luggage to see almost nothing, and then somehow get all the way to Cinque Terre for the afternoon.
That is not happening, the train travel from Florence to Cinque Terre villages takes awhile and does not run that frequent, maybe you could make it to the Cinque Terre in the night time hours.
I would likely drive to La Spieza and drop the rental car off there were you will be very close to the Cinque Terre and skip Florence, this way you could reach the CT in the afternoon without difficulty.

Day 7: head to Varenna and stay two nights
I would definitely either cut out Cinque Terre or Lake Como.
I only quickly visited Lake Como but was not that impressed and would prefer Cinque Terre but many opinions differ on this.
Trying to rush to see both so quickly is a bad idea, better to see 1 or the other for 3 nights in your plan and use another day for Umbria or Tuscany, dropping Varenna off your list.
Travel from one to the other will take a full day so you will lose a day right there in travel.

If you really want to see Florence the gain of one day would allow you to schedule that in with the revised plan.

You will probably get lots of differing opinions on where to stay in Tuscany and how many days in each location. I stayed four nights in Siena, using two full days to explore hill towns by car, and this was perfect for me. The first day I headed south and went to Montalcino, Pienza, and other towns in the area. The second day I went to Volterra and San Gimignano. I loved coming back to Siena in the evening. Parking in Siena can be challenging, but it worked out fine.

However, since you say you have more interest in smaller towns and villages, you might be happy with a different base.

I don't think your day 5 is feasible, even if you are only interested in a quick run through Florence and drop in to see David. For one thing, if you don't have a reservation to see David, you will be waiting in line for a couple of hours, and given what you're thinking, it will be hard to predict what time you will get there to reserve in advance. By the time you get up, get packed, check out of wherever you're staying, drive to the airport, drop off your car, and get transportation into the city, half your day will be gone.

I'd suggest you arrive in Florence on the evening of day 4 and spend the night there; then you can get up in the morning, see David first thing, and decide how much more you want to explore before you depart for CT. If you do that, then I'd suggest staying the first 3 nights in one place.

Enjoy!

As Lane mentioned I think if you asked 10 people what town to stay in for day trips to Tuscany with a rental car you would get 10 different answers.
There is no wrong answer really, plug the towns into Google maps and you will see any town can be reached from the other.

As to staying in one for 4 days vs. 2 for 2 days each, that is really more of a personal preference thing as some like moving around more than others, logistically it really doesn't make much difference so no reason to move to a 2nd place unless you like doing so to experience 2 different hotels or overnight in 2 towns.

Spend a fair amount of time looking at the towns in detail, great photos and short videos online to see where you want to see most and prioritize those for where to stay. And also check for available lodgings you may fall in love with one town but vastly prefer a hotel in a nearby town.

Great advice! As you can see, as I typed everything out day by day and got to the end of my note, I realized, it is just too much to pack in. I've been to Europe 3 or 4 times now and I know this isn't feasible. I think my error was allowing our travel partners (first timers to Europe) have more input and Como is a spot they thought looked beautiful. I have decided to cut Lake Como and pick up a day in the Tuscany/Umbria area (perhaps even in Florence itself) and then maybe one night somewhere between Cinque Terre and Milan (Portofino? Genoa? elsewhere?)

Oh and we will be arriving to Rome a couple days earlier so we are not picking the car up the day we arrive. We'll get adjusted and eliminate the jet lag and then leave out a day or two later. This itinerary simply begins POST Rome.

Thanks for all the insight!