Hi, Mark,
I don't know what age group you fit into, but if you and your wife are young-ish (20s - 30s), I think there is a way for you to "celebrate with the locals." I was in Germany for Christmas in 2005, visiting a family in a very small town outside of Frankfurt. As you probably know, Germans celebrate Christmas on Christmas Eve, and this was, as noted by others here, a quiet, family event (we went to church, exchanged gifts, went to bed early). However, Christmas day was a big party. I ended up at a local club called (hilariously) "Enchilada," where there were literally hundreds of young Germans drinking, dancing, and having a good time. Even as an outsider who spoke little German, I felt warmly included.