There are a number of Christmas markets in Strasbourg. Google provided:
https://noel.strasbourg.eu/en/christmas-guide-and-map
Place Kléber for example is less than 1 km from the train station, so can be done in 10-15 minutes on foot. Or else you can take a tram.
Booking your reservations will be cheaper here:
https://travel.b-europe.com/Eurail-GE/en/booking-tgv#TravelWish
If you book it as 1 return, you'll only pay €4 booking fee, instead of €2 per person and train (€12 in total).
That website asks for a pass cover number; you can just enter I11111111, since it won't appear on the reservation anyway (and won't be linked to your pass).
Yes, it’s only 10-15 minutes’ walk from the station to the central area where the markets are.