Poor cokaer, nothing like having yet one more opinion. But here it is:

I would rather change hotels often, than be stuck in a car for more than 3 hours - especially with kids, one will want to stop often once on the road for all manner of reasons. Then there's unforeseen things - traffic jams, etc.

So:
Munich (2 nights);
Trento (1 night); means you can have a relatively lazy departure from Munich, also gives you more chance to see scenery;
Venice (2 nights - stopping off in Trento means you get an earlier start for Venice the next day);
Florence or better yet, a smaller place in Tuscany 1 night;
Rome 3 nights.

This is a car rally trip, no question, but that was so from the outset. Make the driving as fun as possible, in that case, instead of something to be tolerated from stop to stop.

Thanks Sue. Sounds more like the itinerary I started with. But given the cost of lodging in Venice--might become a necessity....