Thanks all who have provided very helpful guidance. My itinerary seems to be taking some shape. Here is what I have put together collecting the feedback so far and also learning from some other members in the forum who have similar circumstances and plans.
I need further assistance to fine tune it.
Day 1: Arrive at Basel SBB late afternoon 5.30pm, Take train to Lucerne. Stay at Hotel, Evening walk in the area
Day 2: Lake Lucerne Cruise, Lion Monument, Glacier Garden with mirror maze
Day 3: Either a day trip to Zurich - will see if we can get on double-decker train with family car - (any suggestions for day trip kids-friendly activities in Zurich?)
or
Mount Pilatus (golden Round Trip)
Come back to Lucerne in the evening - stay at hotel.
Day 4: Leave for Wengen via the Brünig Pass for scenic rail route, Arrive at Wengen. Walk around the village.
Question here is what time should we leave for Wengen? I am thinking if we leave early morning, we get to Wengen by mid-day so we may be able to do a little more and cover some of the activities from day 5 and 6 in day 4 instead of just walking around the village on day of arrival. Or we can leave Lucerne late and try to fit in both options of day 3 between day 2-4. I have 3 kids (13, 11, 2) so suggest if it will be too much. I am personally leaning towards Zurich option to cover some variety.
Day 5: Go to Lauterbrunnen. Take cable car to Grutschalp. Take train Grutschalp to Winteregg (walk around) to Murren (walk thru town) cable car up to Schilthorn and back, down to Gimmelwald via cable car (playground, self service cheese shop), then to Stechelberg, bus to Trummelbach, see falls, bus to Lauterbrunnen, train to Wengen.
Day 6: Train from Wengen to Interlaken. From there do a cruise on Lake Brienz and get down at Brienz. Take bus to Ballenberg museum. Train from Brienz back to Wengen.
(I am quite open to make ANY changes to day 6 plan)
Day 7: Check out from Wengen, get back to Basel SBB and catch a train back to Paris at early afternoon.
In the above itinerary, I guess Berner Oberland pass is a must-buy. But should I buy Swiss Half Fare Card or a Swiss Travel Pass (with free Swiss Family Card) keeping above in mind ? (Family of 5, 2 adults and 3 kids 13, 11 and 2)
Also any suggestions for the hotels/Air BnB for Lucerne and Wengen?