Bern or Kandersteg

I would choose more time in Kandersteg over Bern any day! Bern is fine but the mountains around Kandersteg are stunning...the beautufiul Oeschinensee is surrounded by impossibly high peaks and there area several inns and restaurants up there that are nice places to linger.

Bern is an attractive city but no point in rushing it just to say you've been there.

Bern is a very interesting city, but given the time constraint, I'd go directly to Kandersteg and spend as much time as possible hiking around Lake Oeschinen. There are multiple hiking trails, but consider the Heuberg Loop panoramic hike. Take the lift to the mountain station, then follow the signs to Heuberg and end up at Oeschinensee and have lunch overlooking the beautiful lake. Note that this hike is steep and difficult in places and for experienced hikers only. Plan on at least 4-5 hours, including lunch and lift transportation from the parking area to the mountain station. (There's also an easy hiking trail that goes directly from the mountain station to the lake that only takes 30-45 minutes.)

Kandersteg, or more specifically, the Berghotel up at the lake. We have stayed there many times and always enjoy it.

https://www.berghotel-oeschinensee.ch

You can now book online. Note that there are no rooms with ensuite bath, but the shared shower and toilet facilities are very clean and private. Ask for room # 1 or 2 if you want a direct lakeview.

If you like, you can stop in Bern on the way and stow your luggage for a short 1-2 hour walk around town, and maybe lunch. But an overnight at the lake is truly special.

Without question stay in Kandersteg. The town itself is nice and has some good restaurants. Definitely go to Oeschinensee and hike up to the Oberbaergli. I've been hiking all over Switzerland and this hike is one of my favorites.