But, cheaper than a hotel+flight. Which is the real comparison.

it really depends on the routes and specific fares, even ignoring the availability of early morning/late night flights or existing accommodation in place (when I visit friends and relatives I don't pay for lodging).

For example, suppose you want to visit Budapest from Rome over the weekend[0].

If you fly out this Saturday, the flight is €10, you arrive at 10AM. If you want to whole day, you can fly out on Friday, for €23, and find accommodation for €45, totalling 68 euros[1]. Traveling by train is sadly way more expensive.

Consider instead Berlin -> Budapest, it's €10 on Friday, direct, with Wizzair, but >100€ on Saturday with stops. The train is both cheaper and faster!

[0] this is where I live and where my family lives, the route I fly most often

[1] prices are from skyscanner, airbnb

Not a night train, but a reasonably random journey I just looked up.

Christmas Day, Graz (Austria) to Munich. 5hr 57 minutes. 1 change in Salzburg. €26.90 one-way.

The same journey at decent times in the afternoon on Christmas Eve only increases to €36.90 - €46.90.

Seems pretty reasonable to me!

In general, the trick is to book in advance to make use of Sparschiene prices. Or if a frequent traveller, buy a yearly rail card, which offers the equivalent Sparschiene all the time.

That's a general issue with trains, the infrastructure costs are massive and don't scale very well compared to planes.