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4 Days and 3 Nights for Norway in a Nutshell - drive or public transport? Where to stay?

I have allotted 4 days and 3 nights to do the Norway in a Nutshell in August (and unfortunately over a weekend - couldn't avoid that with the rest of the trip). I am leaving out of Oslo on Day 1, want to slow down and enjoy the scenery and stay in some of the places along the way. On the fourth night, I need to sleep in Bergen. I fly out of Bergen late the next day (Day 5) so I can't circle back.

I am wondering about 3 things:

1) I am wondering about whether it is better to drive or take public transport. I am open to either. I will definitely pay for a one way car rental from Oslo to Bergen if that better allows me to get to and see the best scenery. Is it worth it? Or will I see things just as well or better from the trains and buses? I figure that I will take boats somewhere no matter what.

2) I am also wondering about towns to stay in. I love Rick's (and others') talk of Balestrand, but I also loved the activities of kayak tours or fjord safari out of Flam.

3) I'm leaning towards 3 nights in Balestrand with one day to go over to Vik and the Hopperstad Stave Church and another for other day trips. What else do people recommend? Kayaking? Biking? Hiking? Renting a car and going farther into the mountains for the day?

So, I was thinking of the following itinerary:

Day 1: Norway in a nutshell to Flam and then express boat to Balestrand, sleep in Balestrand
Day 2: day trip to Vik and Hopperstad Stave Church, sleep in Balestrand
Day 3: one more day of daytrips from Balestrand (see question #3 above) or head back to Flam, sleep in Balestrand or Flam
Day 4: return to Flam (if I haven't already) and continue Norway in a Nutshell tour, sleep in Bergen

I know there are already so many questions about NIN. I read everything going back a year. Sorry for adding more. I just want to make the most of this time in one of the most beautiful parts of the world.

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Update: Hotels were filling fast, so I went ahead and booked an Air BnB in Balestrand for the three nights, so the where to stay decision is done.

So all that are left of my questions above are:

1) Drive or public transport to see the most and best scenery?

2) Things to do in Balestrand area or daytrips from there, again maximizing scenery? Kayaking? Biking? Hiking? Car rental?

Thanks all!