Munich is 2 territories away from Venice, so you wouldn’t be able to move in until Round 2. If you’re playing with the tournament rules, then that is allowed, and Germany would take control of the territory since they made the attack that killed the last defenders. You only have a choice when you have multiple defending powers that kill all the attacking units.
That does not preclude a player from moving from a friendly territory, into a second friendly territory, and then into a hostile territory two spaces away does it?
That is exactly what the rules prevent. You must use your full movement to enter a hostile territory (one that contains no friendly units); think of this in the same way that you can’t move ground units before loading onto a transport.
You can move units multiple spaces into a contested territory though, and they would participate in an attack in said contested territory if you made one.