train tickets/reservations from Munich to Belfort France, help!

I am assuming you are looking up the times on the DB website, that is the one to use: https://www.bahn.com/en/view/index.shtml
Start off by just looking for Munich to Belfort. Use "Belfort Ville", the station in the town, not "Belfort-Montbéliard TGV" which is on the High Speed line outside the town. Do not specify a route, let it pick the fastest route for you.
You do not want any train the goes via Zürich, as that would cost you more to transit Switzerland. If it goes via Strasbourg or Basel it is OK.
For example:

München Hbf dep 09:28, Mannheim Hbf arr 12:28
Mannheim Hbf dep 12:45, Basel SBB arr 14:54
Basel SBB dep 15:15, Mulhouse Ville arr 15:44
Mulhouse Ville dep 16:19, Belfort Ville arr 16:59

Or:

München Hbf dep 11:28, Mannheim Hbf arr 14:28
Mannheim Hbf dep 14:39, Mulhouse Ville arr 17:08 (via Strasbourg)
Mulhouse Ville dep 17:19, Belfort Ville arr 18:00

You could also cross from Germany to France direct on other lines, but I think that they would all be slower.
Then zoom in to show all the stops. If you are crossing at Strasbourg, the last stop before Strasbourg is Kehl, and that is the last German station. Your pass covers you to Kehl, and you need to buy a ticket from Kehl to Belfort, on whichever train you choose.
If you are crossing at Basel, that is the border station.
As this is a French train, you need to buy it on the SNCF site, or trainline.eu

On the search screen at http://reiseauskunft.bahn.de/bin/query2.exe/en, you can go the to option that says "Duration of transfer: Standard" and pull down that menu to choose a minimum transfer time. After getting schedule results, you also have the option to click on the transfer times and adjust them.

Some suggested connections go via Zurich, which would add to your additional ticket price to cross Switzerland, so avoid those. The schedule site will also map the route or show you intermediate stops, so you know exactly where you're going.

If you book ahead for the direct TGV leg from Mannheim to Mulhouse, that ticket will include a seat assignment and advance-purchase discount. If you plan to connect from Basel to regional trains, you can buy tickets in the station and would not need any seat reservations for your route.

How do I indicate on the DB site that I have a eurail two country pass?

You don't don't have to make a reservation for German trains, but it gets complicated. The second itinerary Chris gave you, the train from Mannheim to Strasbourg is a French TGV and there is a mandatory reservation. It does not stop at Kehl so you woulld probably have to pay for the ticket from Baden-Baden, its last stop in Germany. Or you could take a later German train to Offenburg and then take a local train to Strasbourg and buy the portion from Kehl to Belfort from SNCF.

The first itinerary, you could ride the German train as far as Basel Bad station, but then need to have a separate ticket from Basel Bad station to Basel SBB station where you get the train to Mulhouse and Belfort, which is a SNCF ticket.

Have you bought the Eurail pass yet? You might want to rethink it. It makes things complicated and you just might find that it will cost you less to buy point-to-point tickets in Germany and Austria.

To buy a Mannheim-Mulhouse TGV ticket with the Germany portion covered by your pass, do it through your rail pass vendor, such as https://ricksteves.raileurope.com/us/rail/point_to_point/triprequest.htm. Current price is $24 for that leg + $12 for the Mulhouse-Belfort ticket. The DB site is not set up to process those pass holder rates on international trains.

If you're making an optional seat reservation for a train within Germany, then at the start of DB's search, you choose the link for "Seat only (no ticket)." Rail Europe would also normally sell it to you for $11, but it's not bookable in their system at the moment.

Sam,
I have already purchased the Eurail pass. I thought I had calculated it out so it made the most sense. Now not so sure

As regards the two Basel stations. IC and ICE trains from Germany call at both Basel Badischer Bahnhof (a DB/German station) and then Basel SBB. France (SNCF trains) start at Basel SBB. Baden-Württemberg tickets are valid as far as Basel SBB, I was under the impression that applied to all German tickets, since they charge the same price to both stations, maybe it isn't so for Eurail passes.
You definitely don't want to get off the train just to buy a local ticket (CHF 3.80), and wait for the next train. If you end up choosing this route, I would ask the ticket inspector, he will probably say "forget it".