We are two active seniors who are planning a six week trip in the Fall, starting in Milan, going to Oktoberfest in Munich, then thinking about Vienna, Budapest, and exploring the Dalmation coast -- then using the ferry to get back to Milan for our return flight home. We have no reservations yet except for Oktoberfest. We would like to be spontaneous and take advantage of whatever situation appeals to us -- but are uncertain whether we should lease a car for the entire 6 weeks or take public transportation between the big cities (Munich, Vienna, Budapest, Split, Dubrovnik) and rent a car to explore the local countryside. Should we make reservations for lodging or is it realistic to expect we can get lodging on the spot. We have traveled a lot and are comfortable with the European way of doing things and we prefer to go off the beaten path and 'soak in local culture. Are we being realistic with our (tentative) itinerary?
I would go with public transportation - having a car can be a real liability in many cities and finding hotels with reasonable parking can be challenging. I would just rent as needed.
By September you should have no problem finding hotels as you go - I usually book the next one the night before we leave our current location - I do travel with a small computer which makes this very easy.
As soon as you know you want to stay in a particular town, do some Googling to be sure you're not going to hit a big fiesta that has sucked up all the lodgings. That can happen even in September or October.
For lodging you should book slightly ahead online when possible. That is, the day before or the day that you leave city A make a reservation for your next stop. This gives you the flexibility to decide on a day-to-day basis where to go, but it also allows you to get off the train knowing where you are going to sleep, which saves valuable time that is better used for visiting the town, not tracking down hotels. I'd use booking.com for this, but there are plenty of options.
It is possible that you won't find something suitable in an especially popular town (moreso if there's an event), but you should be fine most of the time and if somewhere is full you seem flexible enough to move on to the next town.
For transport I would rely on public transit and get a car occasionally when it makes sense, like if you are spending some time exploring rural regions. A car would be an expensive hassle in the bigger cities, if you need to park it near the hotel that would limit your hotel options, and there may be issues with locations to return it. For regular rentals you pay a very large fee to return in a different country than you rented it, so you'd need to drive it back to Italy.
If you rent a car for the whole trip make sure you do return it to same country where you picked it up or you will have a huge drop off fee. Your Milan to Milan would work except for all those cities in your itinerary where driving is a hassle , you'll deal with ZTLs and parking would be difficult. Why not rent a series of cars as needed?
I would def reserve your lodging here and there when u have a route in mind.
Places like Dubrovnick, Vienna, Milan, (book now for Munich , for sure) can be booked ahead. Frankly it just make things smoother to have a destination planned. I would do mostly public transport for big cities and rent a car as needed ie perhaps austria to n. italy.
That would allow u to vist the Dolomites nr Austria/ Italy border and stunning lake regions of Italy. Be aware however rental drop off charges could be large. It is not recommended to rent in Croatia as there are bigger risks of break ins and car thefts.