Munich to Salzburg to Fussen to Lucerne

Drop it off in Munich or Freiburg. Those have the best train options as far as I can see

Heading west by train from Füssen is not easy, the lines go north.

I suggest you drive to Lindau a town on an island on a lake called Bodensee. This is the last town in Germany on the route to Switzerland. The town is worth half day explore. Drop of the car there, then take a train to Switzerland to get to Luzern.

Thank you both very much. I ended up taking the advice of picking up car in Rosenheim and dropping off in Lindau then taking the train to Lucerne. I am going to purchase a Swiss Travel Pass (with family card). Do you know if I can purchase that in Lindau? I'm not sure how to purchase it if I'm not in Switzerland yet. Thank you very much!

You can buy it online

No you can't buy a Swiss Pass at Lindau, it is a German station, not a Swiss one. You can only buy it at Swiss border and airport stations, or online at: https://www.sbb.ch/en/leisure-holidays/travel-in-switzerland/international-guests/swiss-travel-pass.html
If you buy online, you will need to print it out.

BTW, the Swiss Pass is not valid from Lindau. It is valid from the first Swiss station, which is St. Margrethen. If you are using a Swiss Pass, you will need to buy tickets from Lindau to St. Margrethen.
This is the map which shows where the Swiss Pass is valid (all rail lines shown in red, plus bus, boat and cable cars): https://www.sbb.ch/content/dam/sbb/de/infotexte/uebersichtskarte-sts.pdf
You can see Lindau and St. Margrethen in the top right corner.

Thank you so very much for your help with this. I purchased the Swiss Travel Pass online which will cover our train trip once we enter Switzerland and then will purchase a ticket in Lindau to St. Margrethen. We are excited for our trip next week!