<<" So Zurich to hotel in Hergiswil would mean 2x train changes ie 3x trains that day!">>
I don't understand that.
There are frequent trains from Zürich HB to Luzern, change once, ride to Hergiswil.
It is not easy to get to the major rental agencies ( Avis, Hertz) in Zürich. Don't know where the others are. You could go by public transport, which I do, but likely will take a cab if you choose to get your car in the city.. You won't like the taxi fares.
You could take a train to the airport ( 70-80 CHF taxi or cheap train 6 to 8 times per hour) to rent, but there is an approx. 10% surcharge for the whole cost if you rent there....
Moving luggage around the main stations on handy luggage carts (2 CHF in the slot to get one, get it back when you "plug" the cart back in at one of the many locations) is rather easy.
It is just as hard to get it to the cab line, where you have to manhandle it to the cab.
Once you have the rental car, and manhandle your luggage into it,you have to drive it out of the city. With GPS, not to bad. if you were flying in and were jet lagged, it could be different. In that case I would definitely recommend a direct train from the airport to Luzern, change for Hergiswill and rent your car when you leave Hergiswil (Avis is in Kriens- don't know who you prefer.) Driving in a strange country is tough enough; jet lag makes it unsafe.)
It would make sense to take a very scenic train to Interlaken or a nearby town in the Valley. One train to Interlaken., if you choose to stay there) for a three day stay. Change only if you do go into Lauterbrunnen, Grindelwald, etc.
There are plenty of car rental agencies in Interlaken. It is easy to drive around.
From the Interlaken region there are some very scenic train rides that you cannot reproduce by car. You could come close if you take the car train through the upper Lötschberg tunnel..
If you drive that route, you could go via Zweisimmen, rather than Bern. If you go to bern, park outside somewhere and take the train in.
With a trip organized in that fashion, you would not have a lot of luggage schlepping if you went by train.
There is good trans alpine service from Montreux direct to Milan via the Simplon. However, if you must go to Lugano, you really ought to travel the Gotthard route, from south of Luzern.
Just some suggestions. There are certainly good reasons to go by car, but don't consider ease of handling luggage or ease of access to cities as part of them.