Itinerary help

We are visiting Japan for about 15 days. Please let me know if this itinerary sounds good.

Day 1 - Arrive Osaka
Day 2 - Tour Osaka
Day 3 - Go to Okayama
Day 4 - Tour Okayama
Day 5 - Visit relatives
Day 6 - Visit Hiroshima, stay night in Osaka
Day 7 - Go to Kyoto
Day 8 - Sightsee Kyoto
Day 9 - Sightsee Kyoto
Day 10 - Side trip to Nara, Stay in Kyoto
Day 11- Hakone
Day 12 - Tokyo
Day 13 - Tokyo
Day 14 - Tokyo
Day 15 - Tokyo
Day 16 - Fly home

Also, we are traveling with 5 people in all. What is the best way to get accomodations for a party of 2 & 3? I noticed most places only allow 2 people per room. If you could also suggest good hotels in each area and places to visit in each, that would be great! Someone said that there's a great train through the insland sea that's beautiful. Do you know what they're talking about? Also, when should we start the 7 day rail pass. Thanks so much! What a helpful site.

What is the best way to get accomodations for a party of 2 & 3?

I found that many hotels, especially medium to high budget western style hotels to provide extra beds for three persons per room. Apart from that, many Japanese style ryokan will offer rooms, which accommodate three or even more people.

Also, when should we start the 7 day rail pass.

A 7-day pass does not cover all your major trips completely and costs approximately the same as regular tickets if you use it from your trip from Okayama to Hiroshima and until you arrive in Hakone/Tokyo. A 14-day pass comes more expensive than regular tickets, but covers all your major trips. Considering the comfort advantage, you might want to consider a 14-day pass. If a low budget is most important, I would forget about rail passes and take highway buses instead.