Rail Pass or Separate Tix for Travel in Ger, Itl, and Fra

Pass does not save you from the problem of missing a train. You need to purchase a seat reservation for a specific train, and pay that added fee. Also, France limits the number of seats available for pass holders... so you may not be able to use the pass, even if seats are available for ticket passengers. For me, on the only trip for which I bought a pass, that meant I had to pay full fare for a ticket and leave a pass segment unused, which means I paid twice for that trip.

I'd suggest buying tickets.

I would never buy a rail pass for thus itinerary. At the very least, Frankfurt-Bacharach can be done with a Quer-Durch-Lands ticket for 76 euro for your entire group of 5. There may even be a cheaper way buying separate minigroup ticket from local transport networks. I'll let Lee chime in on that one.
Milan-Monterosso can be done for 45 euro for the entire group with advance nonrefundable ticket 2nd class, or 85 euro 1st class "carte Freccia" special. This is an IC direct train and the fastest way.
Arles-Marseilles is a direct regional train (no 1st class) for 76.50 euro total for 5.
Where the heck are you getting your prices? Raileurope??

Personally I can't see any point to a pass for these trips. Also (in my opinion) 1st class is certainly not needed for your short trips - Frankfurt to Bacharach (and return) or Arles to Marseille, only for the two longer trips and only if you feel you need it for some reason. I almost always travel 2nd class on European trains unless there's a special that gets 1st class for a couple dollars more.

Adding to what Nancy said, 1st class is not even available on the MittelRheinBahn trains to Bacharach. Ditto on Arles-Marseilles route. Monterosso-Arles will be minimum 4 legs, Monterosso-Ventimiglia is a an all 2nd class Regionale Veloce (83 euro total for 5) and Ventimiglia-Arles (155 euro total for 5) changes trains in Nice and Marseilles and only the Nice-Marseilles leg has 1st class seats.

"1st class is not even available on the MittelRheinBahn trains to Bacharach"

I'm not sure that is correct, because, if I put in Mainz to St Goar, 1st class, on the Bahn website, I get a fare for the MRB of 18,90€, which is about 50% higher than the 2nd class fare of 11,80€. St. Goar is the next stop after Bacharach; you can always get off on stop early. I don't get a fare for either 1st or 2nd class if I put in Mainz to Bacharach, because RNN sells those tickets, not the Bahn.

RMV sells tickets from Frankfurt to Bacharach, but it appears they only sell 2nd class tickets online.

Those MRB trains run between Koblenz and Mainz, and the Bahn does sell 1st class tickets for the entire route. However, I always find 2nd class on German Rail satisfactory.

You didn't say if that is from/to Frankfurt Hbf or FRA (airport), but tickets between the airport and Bacharach are 11,20€, between the Hbf and Bacharach, 14,50€. Those fares are less than a day of a railpass.

For the railpass to include the Rhein boats, it has to be valid for that day (ie, if you are not using the railpass that day for trains, you must use a day for the boat). You get a 20% discount on the boat by showing a Bahn ticket for that day.

Assuming that you have other transportation between Frankfurt and Milan, a railpass does not save money for this itinerary, including Rhine boats (e.g., St.Goar-Bacharach for 12.50 euros per person, one way or 15 roundtrip). You can buy tickets locally as you go, which also mostly allows you not to "worry about missed trains." I've always been comfortable enough traveling in 2nd class on trains.