I'll attempt to answer your railpass question, and that primarily deals with how much travel you plan to do.
is the Japan railpass still the best way to get around, especially if you've got to pay for 2 adults and 2 kids.
Its the best in terms of speed and ease of use.
The Typical Tokyo-Kyoto-Osaka one way trip, one doesn't need the purchase of a rail pass.
However add in a trip to Takayama or Hiroshima, then the purchase of the Japan Railpass is would make more sense.
Are there any other rail programs that could save money if we wanted to stop in 3 or 4 other towns/villages?
I think it would all depend on what towns/villages and what rail company service them (if any).