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Advice on an 18 day trip starting in Vienna

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Hi everyone,
I was hoping to get some advice and suggestions on a trip I'll be taking in July. I have a conference in Graz (Austria) that ends on July 2nd. At that point I'll take a train back to Vienna to meet my girlfriend who will be arriving from our home in Winnipeg (Canada). We've both been to Europe only once, and that was a short trip with most of our time spent in France. We both share a love for the outdoors and great scenery, so we are hoping to incorporate a few day hikes into the trip.

Tentative itinerary:
July 2-5: Vienna
5-7: Zell am See
7-9: Innsbruck
9-11: Lucerne
11-14: Zermatt
14-17: Zurich
17-20: Munich

And I've got to ask the very common question I see on the boards: Train or car? I'm not especially concerned about cost comparisons, but it's July so I'm not sure how congested the roads will be. The plan would be to rent a car as I leave Vienna and arrive in Munich. I would really love to drive the Glossglockner road and I'm not sure how easy it would be to just rent one for the day. I'd love to go hike around Lake Oeschinen (Switzerland), but I don't know how I'd do that travelling by train. My initial plan is somewhat based on train routes. I'd consider avoiding Zurich (after seeing hotel prices) and maybe heading into the Black Forest area of Germany (e.g. Baden-Baden), but by train I think I need to go through Zurich. I'd love to hear from someone who has travelled the area in July/August to tell me if renting a car is a bad idea.

The only thing I've booked is my initial flight into Graz and departure from Munich. I'm wide open to any suggestions or thoughts you might have on this trip. Should I be travelling all the way to Zermatt or is my time better spent in the Austrian Alps? Thoughts on replacing Lucerne with Interlaken? Thank you in advance!
Paul

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