1) You have a better idea than anyone else here what your pace should be. I did a city a day in my late 20s but wouldn't advise that to too many people, including my slightly-older self. My #1 piece of advice is travel as light as possible. The train system doesn't support big bags very well, and while you can rely on takkyubin (luggage delivery service) if you have to, the best option is to live out of small (think overhead bin-sized) roll-aboards and do laundry more often. One advantage of Kyushu now as opposed to a few years ago is that the shinkansen system reaches both ends of the island, so basing yourself out of one city for longer and taking day trips to others is more feasible. Others might have good advise on how to do this (my trip was before this new era), but my guess is picking 2-3 out of Fukuoka, Nagasaki, Kagoshima, and possibly Beppu as bases would work well. If you are planning on spending time in Honshu (main island), there are countless threads on this board with sample itineraries.

3) You can price out trips on Hyperdia and add it up for yourselves, but unless you would save a lot with individual purchases, I would go with the JR pass for general convenience alone. Being able to arrive at a station at any time and get on the next train with minimal fuss has its own value.

4) No strong preference for a book, but there are lots of great free resources on the web for trip planning. Besides this board, JNTO has lots of suggested itineraries and free PDF city guides - make sure to look at the links on the right side of many pages. I've used those guides for years. Wikitravel is another good source of info and suggestions. Japan-Guide as well.

5) Besides packing light, if you are smartphone savvy, seriously consider renting an iPhone, Android phone, or a mifi. Just having google maps and hyperdia at your fingertips is worth the expense in my opinion, and the rental/return process couldn't be easier. Unless they physically placed the phone in your hand upon arrival.