Switzerland & Italy - need suggestions

Yes, from Geneva you can easily see Montreux and Lausanne before heading up to Interlaken. I would stay in either Montreux or Lausanne rather than Geneva. You'll be backtracking to Geneva since the train to Interlaken goes through Lausanne on the way. See Geneva and then stay in either of those towns.
There are no trains that go up into the Dolomites. You can take a train to or from Bolzano, Cortina or Brixen. The rest of your time there you will need to rely on public buses. We have done this several times and it works fine! Saturday and Sunday the frequency of the buses is very curtailed but as long as you keep that in mind you can easily see many places.
I would go with the first itinerary in your two lists; train from Venice to Bolzano, see the Dolomites, bus to Brixen to catch the train to Innsbruck. It's a much shorter train ride to Innsbruck from Brixen than from Cortina, which is quite a bit further southeast.

Anita,

Thanks for replying. I will be hiking - the shorter trails as I will be alone and do not want to venture too far off. I would love to do the 6 or 8 hours hike, however, I read that the buses stop running fairly early and do not want to be stranded somewhere. How long do you recommend that I stay in either Bolzano or Castelrotto? RS recommended two nights. I will either base in Bolzano or Castelrotto and will explore Siusi, and Val Gardena. Is 3 nights too long? I also plan to make the loop by bus - Bolzano-Cortina-Fortezza-Innsbruck. I will stay 1 night in Cortina.

Anita, I can't offer any guidance related to the Dolomites, but I did spend some time in Geneva three years ago. I spent one long and enjoyable summer day traveling by train from Geneva to Lausanne and then on to the village of Gruyere. In Lausanne I walked through town down to the lakeside, where I spent two or three hours going through the Olympics Museum, which I enjoyed. Then I found my way to sort of a funicular back up near the RR station. Then to Gruyere. At the station there are one or two cheese plants and stores, one of which has a cheese museum as I remember. Then I hiked up quite a ways to the small village, which is quite touristy, but very diverse, with its castle, great views, several different types of museum, and lots of restaurants and shops. It was a fine day, and both Lausanne and Gruyere certainly merit at least a full day of their own.

Hi again Jennifer,
I know that Rick seems to favor Castelrotto (Kastleruth) for a base in the Dolomites but, in my opinion, it's really not the best place, especially if you are relying on public transportation. It isn't on one of the main bus lines and is a bit out of the Dolomites proper. Bolzano is quite a distance out of the mountains and it will waste time to get up into them by bus every day. I would stay in Bruneck or up in the Val Gardena in Toblach or even just base yourself in Cortina. That said, Cortina is uber-touristy and very expensive...kind of the Aspen or Telluride of the Dolomites. It is a beautiful town though and not bad for just a night or two. All of these places I mentioned are on main bus lines and you can get more quickly to the better, more picturesque hikes.
You can never spend too much time in the Dolomites! We have spent weeks at a time and still want to go back for more.
If you are looking for day hikes I recommend the route that goes all the way around the Tre Cime (Drei Zinnen) or just taking the gondola up to the Seiser Alm and hiking...the views from both of these hikes are spectacular! The views from the top of the Marmolata are also breathtaking! You really can't find a bad hike in the Dolomites!

Hi Jennifer, my apologies, I see my comment above was addressed to Anita, but I was confused and meant that for you, the OP.
Cheers, Larry

Thank you for the quick responses. The information you provided has helped me a great deal. I booked a room for 5 nights in St Cristina. After looking at various mode of transportation and google map it looks like Cortina d'Ampezzo will be a challenge to get to with so many places I want to see. I may skip it.

Is this too much? I realize I will be on the train and bus a lot!

Geneva/Lausanne/Chamonix/Montreux - 9/5-9/8
Interlaken - 9/8-9/11
Innsbruck - 9/11-9/12
St Cristina - 9/12-9/16 (Bolzano to see Otzi)
Cortina - 9/16-9/17 - may skip and add a day to Innsbruck or Venice
Venice - 9/17 -9/18
Turin - 9/18-9/20
Zurich - 9/20-9/22 (fly home) Is the Milano to Zurich train ride scenic? I want to go through the Gotthard Pass but it adds 4 hrs to my journey - 8 hrs vs 4.