It is my understanding that the German Railpass covers border towns such as Salzburg, Austria. Does this pass
also extend to Vienna, Austria as well?
No. Just Salzburg.
Nice try. Maybe you need a map. Vienna is about as far east, away from Germany, as you can get in Austria. Salzburg, on the other hand, is only a couple of km over the border from Germany.
If you are going to be in Munich during your trip to Germany, German Rail sells Europa-Spezial Österreich tickets for as low as €29, each way, with an advanced purchase.
The Bayern/Barvarian pass also is good to Salzburg and vice versa.
The official name of that is the Bayern-Ticket, but it is only valid for regional trains in Bavaria.
The Bayern-Ticket is also valid to Kufstein, Austria, and on the Ausserfernbahn in the Austrian Tirol between Pfronten and Garmisch-Partenkirchen (goes through Reutte).