Christmas week in mountains for non skiers

If you really want a winter wonderland, I would suggest Wengen (or Mürren) instead of Grindelwald.
Grindelwald is at about 900 metres of elevation so there isn't always snow on the ground, especially at Christmas which is early in the season.
Wengen is 300-400 metres higher, and is car-free.
Mürren is 300 metres above that, and also car-free, but smaller and less convenient.
In both locations (and in Grindelwald), you will have hiking paths and tobogganing trails available for non-skiers. Mid-top snow boots (i.e., just above the ankle) are highly recommended even just for walking around, and if you do go tobogganing, check that your insurance covers you - injuries are frequent.
If you are "stuck" with Grindelwald in the end, do not despair: it is a lovely place, it is livelier than the other two I mention, and you can take trains and gondolas to head into the mountains anyway.

Also, I would suggest 4 nights there and just 1 in Zürich. Zürich is nice, but a quick visit will do.

The Zurich train station hosts the largest indoor Xmas market in Europe ( pre- COVID.) Check the dates, and if it
runs past Xmas, you'll have one last holiday experience.
Safe travels,

You never know exactly what the weather will do. Last year we had a white Christmas here in Thun (about 50km from Grindelwald, 560 m. elevation). If it does snow, Grindelwald will definitely give you the beautiful scenery you are looking for and an awesome Swiss Christmas experience.

you're not staying very long in any one place, perhaps drop one destination?

Am now rethinking the 2 nights in Zurich. I was hesitant to try and go from Grindelwald straight to the airport in case there were train issues, but maybe we can have just 1 night, or even do a shuffle of all dates and do Lucerne last and go from there.

Train issues are very, very rare in Switzerland. You can definitely go to Grindelwald upon arrival.
And if your flight out of Zürich is later than 10 AM or so, you can reach the airport by train from Luzern that same morning.

Thanks for the suggestions everyone. If I decide to to stay in Wengen or Murren for 2 days, will it be difficult dealing with our luggage (big suitcases from a 4-6 week trip) on the trip up there.

No, not particularly difficult. People on ski trips have big luggage, and at least in Wengen, I remember hotels offering shuttle services for luggage, or you could stay at one of the hotels right by the train station there (including Silberhorn and Victoria, they're nice hotels). In any case, the walk will typically be shorter than from Grindelwald station to a Grindelwald hotel.