First time in Swiss - recommended town for hiking??

Where are you coming from, and heading to after your Swiss visit? Knowing that will help with recommendations. Enjoy your visit in this beautiful country!

Your Eurail pass is not valid for some trains, so factor that in. Many of us love the Lauterbrunnen Valley, well covered in the Rick Steves’ Switzerland guidebook, which I highly recommend you read. But the train into Lauterbrunnen is not covered by Eurail. Although I am not 100% certain, I doubt any cable cars in Switzerland are covered by Eurail so,you’ll be out of pocket. For reference, as mentioned many time in this Forum, a Swiss Half Fare Card is the best default option for controlling your transport expense, but that is water under the bridge if you already have Eurail.

Luzern is a delightful area for 4 nights and has 3 days of easy activities but you will not find the snow covered peaks you would find in the heart of the Berner Oberland. We found hiking in Zermatt a little challenging even when we did do elevation, so along with expense, that may be an issue. You might look at Kandersteg, which is served by train and has some lovely valley walks as well as one on a high valley at Sunnbüel.

Thanks so much for your replies so far! That’s already very helpful.

Looking into those details.
EURail not usable on some trains? That’s a bit worrying..!
We can’t use the half card for just the cable cars alone?

We are travelling by train from Munich and planning you finish in Milan.

is that your only train travel? Have you already bought the Eurailpass?

Check out Pontresina - it's a small village with excellent hiking options in every direction.

We can’t use the half card for just the cable cars alone?

Yes, a HFC will apply on transportation where you do not use your Eurail pass: trains, cable cars, boats, buses.