I've been to Hamburg too (about 5 years ago) and it was gorgeous. So was the one in Celle (small town in Luneburge Heide) but obviously a lot smaller. To be fair I think most towns and cities won't disappoint. I have heard that Nuremburg is the most famous Christmas market though.
The best I went to is Rothenburg ob der Tauber but far away from any airport so you would need a car.
We started our holiday in Rothenburg ob der Tauber last month! Lovely town, just like something out of a Grimm's Fairy Tale. Of course we didn't see a Christmas market in July but we did go in to the most amazing Christmas shop I have ever seen - Kathe Wolfhart's Weinachtsdorf, next door to the Christmas museum.
We managed without a car but we did have quite a long train journey.
Flew to Frankfurt then train to Wurzburg, change for Steinach then change again for Rothenburg.