[sarasi]

The JR pass absolutely will cover the Kyoto-Tokyo trip if it is within the 7 days- what you may be seeing is that the pass doesn't cover the Nozomi shinkansens. It does however cover the Hikari and Kodama shinkansens on the same route (they stop at a few more stations) so please don't waste your money buying a separate ticket.

If you are using the hyperdia website just uncheck "Nozomi" in the options to get timetables for the other kinds of shinkansens.

The roads will be just as crowded as the trains during Obon- the traffic jams, with cars crawling in queues more than 20km long, are famous at that time of year. Parking can also be an issue, and of course you would need to book well in advance. I don't really recommend it.

The busiest days for roads and trains this year will be August 12 (more in the direction out of the cities) and 15 (back to the cities), but things will be busy in the opposite directions and on other days too.