Options for Hokkaido / Honshu travel

Hello - we (2 people) would like to spend 5-6 days travelling by hire car around Hokkaido (starting in Niseko area) then drop the car off (back in Niseko area), then take a train down to Honshu, stop for 1-2 days at Nozawa Onsen, and then continue on a train to end up at Nagano and then Hakuba. We would like to know if anyone else has done a similar itinerary and what you would recommend. We are interested in seeing some of the Northern Honshu scenery on our journey to Nozawa Onsen and then through to Nagano - is the train journey enjoyable (do you get to see nice scenery along the way?) as we wont really have time to stop at many places except Nozawa Onsen. We are also looking for the most economical way to do this. Thanks.

we (2 people) would like to spend 5-6 days travelling by hire car around Hokkaido (starting in Niseko area) then drop the car off (back in Niseko area), then take a train down to Honshu

I recommend to pick up and drop off your rental car in a large city or an airport rather than in the village of Niseko, where there is almost no rental company present. For example: pick it up at Chitose Airport (assuming you arrive by plane), drive around and drop it off at Hakodate, from where you take the train southwards.

stop for 1-2 days at Nozawa Onsen, and then continue on a train to end up at Nagano and then Hakuba.

I mentioned in a different thread (also by you, I think), that you don't have enough time for such an itinerary. Either you drop one of the two Nagano towns or you opt for a flight between Sapporo and Matsumoto (train trip takes 12 hours). Even then, 5 days will be very little time to visit all three towns.

is the train journey enjoyable (do you get to see nice scenery along the way?)

Some passages are nice, but beyond Hachinohe (shinkansen) it is mostly viaducts with relatively high walls and tunnels with limited views of the landscape.