My parents enjoyed staying in Reit im Winkl and I liked Berchtesgaden as well. You can get better deals in the small towns, but the further from cities you get the less English people speak (if that's a problem). Regensburg and Nuremburg should be easily accessible by train and have nice medieval architecture. I personally enjoy just being in the mountain towns to the south, you can't really go wrong. Tons of hiking, scenery, good food, etc. but less castles/churches.
Gluten free is doable if you eat meat, but it's not really a "thing" like in the US. Lots of meat and potatoes options, as well as salads. Something might come with spaetzle and you just don't eat it. Again knowing the language will help, e.g. schnitzel comes in a variety of forms some fried with bread crumbs (Wiener/paniert schnitzel), but some are just meat with a sauce (Jaegerschnitzel). Many sauces may contain flour as a thickener so beware if it's a big issue.
For cheap lunch delis are your best choice: just buy a thing of sausage and cheese. There's usually at least a meat place (Metzgerei) and cheese place (Kaeserei) in every town, then fruit/vegetables in the grocery store. I was happy subsisting on meat, cheese, bread, nutella, and beer but I think my wife got a little tired of the diet.
