Thank you so much for your reply. We have looked at rental cars - but unfortunately we are throwing this all together very last minute so we will end up spending the money on the one way drop off or on changing our flights or flying to / from smaller airports during our trip so just looking for the most convenient option to maximize our time.
If flying from the small airports, just check price and availability. A one way rental from EVE would probably be cheaper than from TOS.
Two in our group are vegetarian which might be a problem. Could you recommend two towns that would be good places to stay assuming two nights at each?
Someone has actually made a guide to eating vegetarian in Lofoten:
https://www.vegannorge.no/artikler/lofot-guide (also in English). For places to stay: I would look at Svolvær - the "Lofotvær" ambience and not so far from the E10. And then a place you like further out in the islands, starting to look at Reine, maybe? I haven't stayed any of the places, but in Ballstad, Leknes and Sortland many years ago. Anyhow, driving is part of the experience.
From Lofoten my sister will fly home to USA and my husband and I will stay another 4-5 days. Deciding between Abisko in the hopes of seeing the Northern Lights even though I know chances are slim (around Aug 21-24), or flying down to Bergen and doing a self drive tour of the scenic routes. Unfortunately, the only flights we can find home to USA are from Oslo so have to eventually end up there via car or plane.
Still in the end of August it does not go completely dark, so the chances are slim to see the northern lights. Even if you get clear skies, the moon is up at those days, making it harder to see. And after living in Northern Norway for 5 years, I learned that the biggest factor for seeing northern lights, except weather, is if you are outside looking for it. In august, that means staying outside for some hours between 11PM and 3AM.
But Narvik might be interesting if you are into WWII history, and the drive up to the Swedish boarder and to Abisko is very beautiful.
Even if one of your party is flying out of Lofoten, the others of you don't need to that. If you go back to Evenes you can keep the options of Abisko, Bergen or Oslo open a bit longer.
If you do end up renting a car out of Tromsø, I would recomment you use your extra 4-5 days to backtrack to Tromsø, via the Andenes-Gryllefjord and Botnhamn-Sommarøy ferries. You need to be careful to check the ferry times, and should divide it up in several days. On the other hand, the scenery is fantastic, the Senja island is Norway in miniature and the two ferry rides gives another dimension. It is about 9 hour total though.