Thanks for all the feedback. I have decided not to stray too far from my latest plan. But I have decided to take out the Hakone day and add in another day in Kyoto. My revised thoughts below:

Day 1: arrive in osaka at night, purchase icoca and haruka, take jr haruka to kyoto

Day 2: arashiyama area

Day 3: fushimi inari, nishiki, kamogawa odori, gion, pontocho

Day 4: higashiyama area, aoi matsuri festival, kaiseki dinner

Day 5: activate JR pass, train to hiroshima via meiji castle, explore park and museum, ferry to miyajima

Day 6: itsukushima shrine, mt misen hike, train to tokyo

Day 7: shibuya, harajuku, shinjuku

Day 8: asakusa, ueno, sanja matsuri

Day 9: mitakesan hike

Day 10: tsukiji markets, ryogoku

Day 11: train to osaka, dotonbori, minami

Day 12: explore osaka

a couple more questions :
- is it still worth getting a JR pass?
- i was still keen on experiencing an onsen, do i have time for it? Could i fit it in one of the kyoto days?