"Also, can we use the Swiss travel pass for gondola ride to mt pilatus in Lucerne, and boat ride in Lake Lucerne?"
Yes, these rides will be fully covered.
"Is it worth getting the first class swiss travel pass or is the 2nd class is fine?"
For most people, 2nd class is fine. If you want wider seats and have a generous budget, you can of course spend the extra for 1st class. The rail guru The Man In Seat 61 has pictures of the inside of 1st and 2nd class carriages here: https://www.seat61.com/Swiss-trains.htm#What%20are%20Swiss%20trains%20like
To see what is covered by a Swiss Pass, look at this map (it's a PDF; go to the second page, and magnify the part you're interested in): https://www.sbb.ch/content/dam/sbb/de/pdf/freizeit-ferien/ferien-kurztrips-schweiz/internationale-gaeste/sts-geltungsbereich_en.pdf.
Anything with a solid line is 100% covered. Anything with a dotted line is 50% covered, unless there is circled number 1 next to it, in which case it's only 25% covered. Note that for 2017, the boats on Lake Luzern and the rides up to Mt. Rigi and Mt. Pilatus are fully covered (some of this is a change from prior years, when part of the trip up to Mt. Pilatus was only 50% covered). The trips up to Mürren are 100% covered; above this is 50% covered (such as the Schilthornbahn). The trip up to Wengen is 100% covered; above this is 25% covered (such as the Jungfraujoch).
Do make sure you understand ALL the points in Tim's excellent post. Unless you feel lucky, you will not want to pre-purchase your ticket from Paris to Switzerland, and you want to be IN the mountains, not near them in Interlaken.