Below is a listing of picturesque towns and villages in Germany which you may enjoy visiting. I did not list those towns that have either a significant castle or cathedral/church. For those lists you should go to Castles in Germany and Churches and Cathedrals in Germany.
Alfeld, Niedersachsen
Altensteig, Baden-Württemberg
Baden Baden, Baden-Württemberg
Bad Bergzabern, Rheinland Pfalz
Bad Herrenalb, Baden-Württemberg
Bad Urach, Baden-Württemberg
Beerfelden, Odenwald (Hessen)
Breisach, Kaiserstuhl
Burghausen, Bayern
Cochem, Mosel, Rheinland Pfalz
Duderstadt, Niedersachsen
Eifa, Nordhessen
Ettlingen, Baden-Württemberg
Freudenstadt, Schwarzwald
Goslar, Niedersachsen
Gutach, Schwarzwald
Helmstedt, Niedersachsen
Hildesheim, Niedersachsen
Höglwörth, Bayern
Horb, Baden-Württemberg
Kämmerzell, Hessen
Lindau, Bodensee (Bayern)
Lindenfels, Odenwald (Hessen)
Lingelbach, Hessen
Michelstadt, Odenwald (Hessen)
Münden, Niedersachsen
Oberwesel, am Rhein
Quedlinburg, Sachsen-Anhalt
Schlitz, Hessen
Schwäbisch Hall, Baden-Württemberg
Tangermünde, Sachsen-Anhalt
Tröstau, Bayern
Tübingen, Baden-Württemberg
Weinheim an der Bergstraße, Baden-Württemberg