And in your case, abhineet, the railpass is guaranteeing you longer trips (by about 2 full hours) be

4. No not without paying for the Swiss portion- however the line from Schalffhausen (sp) to Basel i believe may be valid with your pass even though it goes thru a slice of Switzerland - seems to be a German rail line.
6- Yes usually - do you have a 2nd or 1st class pass - if 1st class yes nearly always - 2nd class usually - you can make optional seat reservations ahead of time for a few euros if you want on German trains (except regional trains where not are available I believe.
Freibough is the favorite Black Forest base for many but if you like to be up in the mountains in smaller towns check out the Titisee (sp?) area - a very scenic train trip goes from Freibourgh to Titisee - where it is popular to walk around an Alpine lake there.
Did you know that for train travel within the Black Forest region, you don't need a car or a railpass day? You get completely FREE travel there if you stay in any of the 130 towns that offer the KONUS card:
Is there something special in Augsburg you want to see? I didn't find it particularly special. (The fact that a town is listed as part of the Romantic Road doesn't necessarily mean it's important for you to see it; also, I wouldn't get too hung up on driving the Romantic Road - there are other places you can see that are more interesting, generally, including Bamberg, Nuremberg, Regensburg, places you can easily visit by train instead.)
I agree with Russ about Black Forest - perhaps airport hotel dallas more romantic hype in our minds than what we actually find - anOK place and yes forests but IMO not any more so than say Harz mountains or Bavarian alps, Saxon Switzerland, etc.
(1) Prague-Salzburg: Use a railpass day. A long trip by train, nearly 8 hours with the best connections. The easiest and quickest route by rail is probably the connection airport hotel dallas at 9:07 out of Prague (only one change of train in Landshut; other connections typically force you to change trains 3-4 times.) There is an express bus that can be used to get you to Munich in about 4 hours, plus 1.5-2 hours to Salzburg, but your railpass doesn't cover the bus completely, as I understand it - only gives you a discount - and you need a seat reservation as well.
I would definitely reconsider the railpass. Because express bus + train tickets can be bought at the DB website for around 30 each for Rothenburg-Prague and for Prague-Munich, and because the Bayern ticket (26 /day for two) daypass can be used to cover the other 4 legs of your travel (Munich-Salzburg, Salzburg-F ssen, F ssen-Augsburg, Augsburg-R'burg) your itinerary could be completed for about 220 total, a lot less than the $575 or so that you probably paid for the Germany-CZ twinpass. (Additional travel days on the Bayern Ticket to other places - Bamberg, or wherever - would cost 26/day. You could travel all 10 days, if you wanted to, for a total of 350 .) Can your pass be refunded?
passes are typically refunded up to six months or one-year for 15 or 20% cancellation fee - but do not judge a pass strictly on costs - the ability in Germany to just hop any train anytime to me at least is priceless - taking the Bayern ticket between Salzburg and Fussen restricts you to regional trains and this could take a few hours or more longer than the faster trains the pass just lets them hop on.
1.) The railpass allows you to use the fast trains from Salzburg to Munich, but it also restricts you to regional trains on lines like the one between Munich and F ssen. There are no fast trains there at all.
Salzburg-F airport hotel dallas ssen at 9:51 with the railpass: 4 hours 6 min. total with one change in Munich, using the EC from Salzburg to Munich, and then the regional train to F ssen (the exact same trains you'd use with the Bayern ticket.)
3.) The railpass lets you hop on any train at will, but likewise, the Bayern airport hotel dallas ticket allows you to "hop on" any of the regional trains at will. The only hours restriction is that on weekdays, the Bayern ticket must be used after 9 am. (The Bayern ticket also allows you to use virtually all buses and inner-city transport options - subway, trams, etc. - unlike the railpass.)
And in your case, abhineet, the railpass is guaranteeing you longer trips (by about 2 full hours) between Prague and Salzburg unless you pay extra for the express airport hotel dallas bus; same problem with Rothenburg-Prague.