We found that is about $100 more to rent a car in Venice rather than Slovenia. I am guessing this is a no brainer, but is there any reason not to rent a car in Venice rather than taking the train to Slovenia, and then renting a car? Is the train/tram ride much more scenic, and something not to be missed? We do really enjoy train travel, but seems it will end up taking around 6-10 hours rather than 2.5 to Ljubljana. With 2 adults and 2 kids, I am guessing the trains, tram, train, etc will end up costing a lot more than $100, unless the tolls are especially expensive? Is there a certain time of day or day of the week we should avoid travel, or is there not much traffic? Thanks!
With 4 people, just rent the car in Venice. There are no direct trains to Slovenia, so the 6-10 hours you are referring to is taking a train to Austria and then down to Slovenia or taking a train to Trieste, tram to Opicina, walking half a mile and then train to Ljubljana. Just not worth it for what is basically an easy 2-hour drive and the fares will all but cancel out that price advantage of renting in Slovenia.
That said, you will incur some additional costs by renting in Venice. First off, the toll from Venice to the border is about €10 one-way, but you'll also have to stop at a gas station before the border to buy a vignette (toll sticker) for Slovenia, which will cost another €15 for 7 days or €30 for a month, depending on the length of your stay. Slovenian rental cars already have it.
However, in addition to the saving in pure driving time, if you rent in Venice you also don't have to go all the way to Ljubljana, crossing half the country before you can start exploring. Instead, you can head to the Julian Alps, Piran, the Vipava Valley or wherever in Western Slovenia you want to go as soon as you cross the border, saving you another two hours' travel time.
Regarding when to travel - in July, avoid the main highways in the direction of the coast and Croatia on Friday afternoons and Saturdays and avoid highways leading from the coast and Croatia towards the inland on Saturdays and Sundays. Saturday is especially problematic as it is a so-called "change day" on the Croatian coast, when most tourists either arrive in Croatia or head back home to northern Europe, causing bottlenecks at the Slovenia-Croatia border.
One of the easiest and cheapest ways to get from Venice to Ljubljana might be the GoOpti Shuttle service. They offer service from a number of different locations in that part of Europe.
You'll have to contact them for more specific information and costs.
You could also consider a bus as a budget option: http://www.drd.si/time.htm
A note on DRD: it's not really a bus line as much as it is a passenger van service. You cannot rely on just showing up and buying a ticket right before departure, if they don't have any tickets presold they may not do the trip at all, it has happened to travellers before.
This year, German operator Flixbus launched a proper bus service between the two cities, though I have yet to come across any reviews of it.
However, all things considered, if the price difference is only $100, renting a car in Venice will probably still be cheaper than four return fares on any of these services.
Have you considered the ferry from Venice to Piran? And then renting from there?