Places, car hire and train reservations

We are four travelers visiting Japan in mid October for 16 days.
We are planing to use the trains for our transportation and we will get the JR pass. My question is when do we have to make the train reservations to make sure we will not have a problem? Is it too busy from 19th October to 4th November in Japan in terms of tourists ?
My second question is related to the places we are going to visit: should we spend 2-3 days in Shikoku island or instead visit Sendai for a day or two?
Finally, we are thinking of renting a car to explore the area between Kanazawa, takayama, Matsumoto, Kiso valley etc.
Would it be easy and practical to rent a car to explore this area?
Thank you
Afro de Milos

You should always make reservations as early as possible; there is nothing to gain by waiting, but potentially much to lose.

I liked Sendai and nearby Matsushima and Shiogama Jinja. Some great onsen there too.

I've rented a car to get around between Takayama and Kanazawa and stopped off at the different touristic locations in between. Worked well for us. As for car rentals, you very likely need an International Driving Permit (the 1949 Geneva Convention one) as the rental companies I used always insisted on seeing one from me.

@Firas is correct as usual, however I have never had trouble booking a train ticket two days in advance. As to the choice between Sendai or Shikoku it depends on how it would fit into you itinerary, what you want to see etc. If you visit Sendai at the end of your trip then the autumn colours should be getting going.

My question is when do we have to make the train reservations to make sure we will not have a problem?

Apart from the very limited number of certain trains that are reservation-only, it's always possible to hop on a train and stand, or hope to sit in the non-reserved section, or queue at the platform to sit in the next train or the train after the worst. This often gives you freedom rather than to rush for your reserved train, so I as a local resident always go for the non-reserved unless it's the year-end or obon period.

But if you insist on being sure you can sit together the minute you board your train, then there is no reason to wait right after you validate your pass.

should we spend 2-3 days in Shikoku island or instead visit Sendai for a day or two?

That totally depends on your preference. I've been to both, and I would visit either again. Both regions have cities, nature and history. One of the biggest differences is that if you go to Sendai you can still visit the ruins of the Great East Japan Earthquake and Tsunami, and perhaps learn lessons while giving prayers. Sendai City itself is very active and sophisticated, and has a nice little bus called Loople that takes you around town.
http://loople-sendai.jp/en/

As for car-rental, my understanding is that it would be against the law to drive without an international driver's license, unless the relationship of your country with Japan waves it!