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Beartooth Highway advice, please?

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We (me, my husband and our 11-year-old daughter) are planning a driving trip that includes Badlands/Mt. Rushmore, Yellowstone and GTNP in late July. Current route has us going from Rapid City to Cody (overnight stop) to West Yellowstone via the park’s east entrance, but after doing a little more research, it seems a drive on the Beartooth Highway is not to be missed.

Looks like we have two options:
1. Re-map the complete route from Rapid City to West Yellowstone to go through Billings and Red Lodge, MT (staying overnight in or near Red Lodge)
2. Keep the overnight in Cody, but drive up to Red Lodge from Cody, then back down the Beartooth Highway into the park and West Yellowstone

I’d love to hear some recommendations and advice on these options – or others – from folks familiar with the area and the drive. We are Midwesterners who haven’t spent a lot of time out west – anything and everything will be a new experience for us and we’re very excited to see this new part of the country. Our main interests are scenery, wildlife, history and just being somewhere very different from our other travel experiences. To be honest, I’d picked Cody because it seemed like a logical stopping point with some fun things to do/see, but there’s nothing that, in my mind, makes Cody an absolutely necessary stop on this trip.

We were interested in possibly stopping in Deadwood and at Devil’s Tower between Rapid City and Cody, but it seems we could also do those stops between Rapid City and Red Lodge, no? And while I know that either of the new options will add some time to the drive, it doesn’t seem insurmountable.

Full itinerary is this – obviously, because of the flights, we’re somewhat limited in our overall time frame. Flights are booked. All overnight accommodations have been reserved, but can be canceled.

Fly to Denver and drive to Rapid City (2 nights in Rapid City)
Drive from Rapid City to Cody or Red Lodge (1 night in Cody or Red Lodge)
Drive from Cody/Red Lodge to West Yellowstone (3 nights in WY, we have out-of-park lodging reserved b/c in-park was booked, but I will keep calling Xanterra for cancellations)
Drive from WY to GTNP (2 nights at Jackson Lake Lodge)
Drive from GTNP to Denver (1 night in Denver before flying home the next day)

Thanks, in advance, for your help!

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