Here are some answers:
- Could you let me know whether I should purchase 21 day passes or 14 day passes?
- Can you use the JR Rail pass in Tokyo for normal trains?
Looking at your itinerary, you'll be best to get a 14 day rail pass starting on day 6 until the end of your trip. Your expensive travel starts with the trip to Nikko (return is around ¥10,000). So getting a rail pass only really starts making savings from then.
For day 1 => 5, all the hops you do around Tokyo will be best done with non-JR metro travel. For this portion of your trip you should buy a one way Narita Express and Suica prepaid metro card package at the airport JR desk when you arrive. This gives you the travel from the airport to Tokyo on the Narita Express plus a prepaid metro card with ¥2000 on it for ¥3500 (normal price is ¥5000). You'll be doing 3 days of fairly busy travel in Tokyo so will easily spend the ¥2000 on the prepaid card. For a family of 6 this will save you ¥9000 ($110 AUD).
You can use the JR Pass for travel in Tokyo on the JR Yamanote line, but I wouldn't recommend it in this case. With the Suica metro travel card I recommend above you can still use it on the JR Yamanote line should you need to.
- We are travelling from Tokyo to Kyoto on the 28th Dec, can we make a booking on a train before we leave Australia
as I know this is a very busy time in Japan.
I'm afraid you cannot make reservations for this line outside Japan. When you arrive at Narita, you can exchange your Japan Rail Pass at the JR counter specifying it's activation date to be day 6. At this point you can also reserve seats for travel you intend to do on your journey. It is peak season, but a gap of 7 days before your trip to Kyoto should give you ample time.
- When we travel from Kyoto to Myokokogen (via Nagano) will we be able to use the JR Rail pass? Where can I
access the train timetable and can I make a booking for these?
Yes - you will be able to use the Japan Rail Pass for this (here is an itinerary: http://goo.gl/MQzML). You can access train timetable information and plan your routes at the Hyperdia website. We also have a video explaining the options JR Pass holders need to select on Hyperdia to ensure the suggested trips are valid.
Hope all this helps and you have a great trip!