Use the holiday calendar to pick your base
Intercity coaches from Taxqueña and Observatorio run through the holidays, but frequencies thin on 25 December and 1 January. Rent a car only if you are comfortable with topes, night driving and city parking; otherwise pick two destinations within about two hours and use them as day trips. Budget roughly 900–1,600 pesos per person per day for a car with insurance, tolls and a meal, or 400–700 for coach return plus entry fees. Rates at mid-range hotels in the capital typically climb in the last week of December, so lock in a refundable rate before October.
North and west: pyramids, silver towns and the monarch forests
For something colder and greener, head west to the Monarch Butterfly Biosphere Reserve around El Rosario in Michoacán. Colonies are dense from late December through February, so the holiday window is genuinely good, but the altitude at 3,000 metres is punishing if you have just landed. Go with a guide from Zitácuaro or Angangueo, wear layers and start early; the horseback option saves the steepest hour. Taxco, in Guerrero, is the other strong western day trip — the Santa Prisca church and the silver workshops along Calle Benito Juárez fill a full day, and the road from Cuernavaca via Amacuzac is quicker than the old highway.
South and east: volcanoes, gardens and market towns
Closer in, Tepoztlán in Morelos is the easiest half-day: the Tepozteco climb takes about 90 minutes up and back from the town centre, and the market fills with ponche and tamales over the holidays. Skip it on 1 January, when the trail is packed and litter builds up. For a quieter alternative, go to the Xochimilco embarcaderos on a weekday morning — a trajinera for an hour or two is a gentle way to spend 26 December — then continue to the Dolores Olmedo museum in La Noria, which has peacocks, agaves and a fine pre-Hispanic collection. Neither needs a car; the Tren Ligero reaches Xochimilco.
Which one I would book
There is no need to chase a fixed itinerary. The real advantage of a Mexico City base over the holidays is that you can decide the night before, depending on whether the morning is clear over the volcanoes. Keep one day unplanned, keep your hotel in a walkable district, and use the metro to reach the bus terminals instead of paying for airport-style transfers. That flexibility is worth more than any single reservation.