All this stuff is excellent.
I plan on possibly visiting Italy/Rome and then Ending up in London. I only have 7 days of independent travel so I would rather not spend 5 out of 7 days on a train :]
Also another question:
While i'm traveling between Hostels, what do I do with my luggage? For example when I leave my Hotel in Paris to lets say a Hostel in Italy, do I head straight to the hostel so I can drop off my larger luggage? No way i'm gonna travel the city with a rolling bag.
You can store your luggage at the hostel in their room or a locker as the previous poster said. Hostels are used to this--no worries there. Make sure you have mini locks on the zippers if you're leaving your luggage in such a place. Lockers at train stations also work if you happen to run into a station that has such a thing on offer.
As an FYI, time is too precious, so either have enough time to visit each city properly or if short on time stay in just one region and savor it.
Too much in too short a time is a whirlwind blur and MUCH, MUCH LESS memorable. Europe is meant to be visited
SEVERAL times. Heck, Paris/Versailles alone is a good 5 days on a "rush". That's how much stuff there is to do in just one city....