I think your pace is doable. I am not sure that two days in Tottori is necessary, but if you also plan to visit the sand dunes, OK. I would consider as day in Isumo.
And you pass right by Hioroshima and Miyajima Island to go to Yamaguchi.
You have 7 days outside the Osaka/Kyoto area, and if you plan to stay seven nights away from the Kansai area, it makes getting a 7 day JR Pass difficult, because you need the 8th day to get back to the Kansai area.
Are you open to travel on a night train? You could activate the 7 day JR pass on day 3 (Kyoto to Tottori) and then take a night train back to the Kansai area on the final day of the JR Pass. It would drop you off in Okayama, which might be where you want to go.)
There is a 5 day Kansai Wide area pass, that might also work out well, to help you on the other days. You have 12 days listed on your trip, which usually means that you will need 13 days of coverage (the final day is to get back to the airport).
If your itinerary is flexible, you could push things around so that you could have 7 day JR Pass to start, and then finish with a 5 day JR Wide area pass. A night train could also be used to and from Tokyo.
You could just get a 14 day pass, but I am trying to reduce the cost. Using nobi-nobi seats on a night train also saves you on hotel costs.
The other five day Kansai pass is the Kintetsu pass, which gets you from the airport to the Namba area, as well as some transportation between Osaka and Kyoto (and Nara, if you plan to go there). It can also get you to Nagoya, if you plan to visit the Osu shopping area.
As for hotels, I usually stay in a single at a business class hotel, a Ryokan, or at a hot springs resort. I have also done a Temple stay in Koyasan. I find the business class hotels have internet, and I can Skype my wife in the mornings and evenings.
I also don't know how much time on your first and last day to visit places. You list going to Kyoto on the first day, but do not mention when you arrive at KIX, and when do you have to get to KIX on your final day. If, for instance, you are to arrive at KIX at 3:00 PM, but the time you go through customs, and travel to Kyoto, it may be dark. Going to Namba may be a better alternative, because you could always walk around dotonburi that evening.
http://www.japan-guide.com/e/e4001.htmlAre you still flexible on your dates as to where you are staying?
Are you interested in Fireworks? There is some in Atami (between Tokyo and Kyoto) on Dec 4th, 11th, and 18th.
http://www.atamispa.com/event/hanabi/What about the winter Illumination in Nagoya, Nabana no Sato?
http://www.japan-guide.com/blog/scott/121127.htmlI given you some passes to consider. I will need more information to be more exact.