Austria

Check the routing on the Die Bahn site. The main issue with the train is that you need to be sure you are on the correct side of the river for the town you want. We biked from Melk to Krems (down river)and took the boat back, so didn't actually take the train. It's quite a nice area, but you don't have time to visit towns off the boat unless you plan to stay until the next one. Rick's hotel suggestions are good in Melk. We stayed at the Gasthof Goldener Stern a few years back - right under the Abbey. As I recall, Melk is smaller and quieter than Krems. Durnstein looks like it would be a nice option but haven't explored it. The old town in Linz is small but nice, but it's mostly an industrial city - not a lot of charm left.

Yes you can catch a train to Melk and then either take the boat or train to places like Durnstein (boats don't start till late April). A great place to stay in Durnstein is the Stockingerhof:
http://www.stockingerhof.com/
Few tourists and set right amongst the vineyards. Peter and his wife run a nice place with great wine and very nice rooms.

It will be much faster to take the train from Salzburg to Melk, then take a ship on the Danube to Krems. Check the website www.ddsg-blue-danube.at for ship sailing info. The Melk-Krems part of the Danube is quite beautiful. You can also combine ship/ rail/ bus so you are not waiting too long for the next sailing. Go to www.oebb.at for land travel info. A little research on these websites will help make your journey more pleasant!

We took the train to Melk, we actually had to change trains, but it was no problem. The monastery was absolutely beautiful and the village of Melk was picturebook perfect! We only spent an afternoon there, but it is on the Danube. The view from the balcony of the monastery was breathtaking.