If we were to drive, we would go around Lake Michigan towards Grand Rapids then cross East to Sarnia where we would stop over for the night. That's 5h30 drive so a full day driving with breaks. Niagara falls are 3h drive away which could be done the next day.
If you drive just do the drive in a day. It'll be long, but it'll save you time for exploring later on. An eight-hour drive still allows for some short stops along the way.
We could stop at Rochester or Syracuse then hire a car for 2 days and explore the lakes (go to Watkins Glen), then take the train again for the second leg to New York. Has anyone done anything of the sort? Does it seem doable?
This is silly. Spend a lot of money for a train, take time to rent a car, explore, take time to return car, spend more money for another train. Rochester is only 1.5 hours by car from Niagara, Syracuse is 2.5, and both are detours from the Finger Lakes.
Just rent the car in Niagara or Buffalo, and drop it off in NYC. If you drove from Chicago, just keep that same car through to NYC. This would definitely save you time--you can be in the heart of the Finger Lakes region in just two hours, rather than dealing with being out of the way and dealing with rental agencies. It may also save you money. Five tickets for the train, twice (thrice if training from Chicago), is not something to overlook.
Also, on your way into NYC, you can stop in the Catskills.












