>> I suppose it will be a lot colder and whiter going in December as compared to October.
Certainly colder. Possibly whiter. Snow in December at the altitude of Guarda (around 1,650 metres) is not guaranteed, but you could be lucky.
Last year and the year before were not very good for snow around Christmas time, at least in the Jungfrau Region. I was in Wengen last Christmas (altitude 1,274 metres) and there was no snow in the village. Snow was visible on the surrounding mountains though. Even at Kleine Scheidegg (altitude 2,061 metres) there was no natural snow on the ground. There was some man-made snow for people to ski on, which was just like a narrow white trail snaking down the brown grass of the mountainside - rather a sad sight really :-(
>> Just as a background, our trip in May 2015 was mostly travel on the panoramic trains (Glacier, Bernina Express, Golden Pass). Thoroughly enjoyed the comfort and luxury
Well, the train from Landquart to Davos is certainly nothing like that! It's a local train, comfortable but basic. Some carriages have wooden seat backs, cushioned seats. I have attached a few photos.
>> Just not lucky with the mountain excursions, which is why we want to see either Matterhorn or Glacier 3000 (New to us). We'll try to pick a clear day, if possible. Your views/suggestion on this would be much appreciated.
Hopefully you will have better luck this time. However, the weather/cloud cover might change (for better or worse) during the time you are travelling from Interlaken to Zermatt. Or you might not be able to check visibility if it is still dark when you leave Interlaken. You just have to hope for the best though!
>> Btw, now thinking of travelling a day earlier and staying for 1 night at BASEL to see the Christmas Market, before proceeding to Interlaken. I understand last day of the Christmas Market is on 23rd Dec
Interlaken also has a Christmas Market. Last year, it ran until 26 December. It closed at 6pm on 24 Dec and 25 Dec, and 8pm on 26 Dec. That might be something to do after dark.