CDW entirely covers the car's deductible. CDW is payable at the car rental agency where you pick up the car. Your American driver's license is all you need in most European countries. But if you want to rent a car in Spain or Hungary you'll need an international driver's license. While ages vary from country to country and company to company, those between 25 and 75 should have no trouble renting a car.
Cars come with the necessary insurance and paperwork to cross all borders within western Europe.
Ask for specific limitations if you plan to drive through Eastern Europe. You can normally pick up and drop off a car at any of your rental company's offices in one country. You'll find a list of car rental companies on our Tips and Tricks page. But lugging a tent and camping equipment in and out of a rental car is no picnic, and by train it's almost unthinkable. If you're planning a leisurely trip that goes heavy on the countryside and light on cities, renting a camper van may be right up your alley.