Provided you pack appropriately for the cooler, wetter weather, Europe in the fall is fabulous. There won't be as many tourists around, but you're unlikely to be the only person in the hostel! More likely, you'll meet Europeans traveling around their own country, or perhaps longer-term travelers, instead of only North American college kids, and some of your fellow travelers may even offer you accommodations at their homes later on in your travels.
Far from being less friendly, I would expect most locals to be a little friendlier, now that the summer rush has passed and life has slipped more into it's usual routine.
As far as what to see, that's really a tough call, and depends entirely on what intrigues you. I could give a page of suggestions for Paris alone, for example, but if your interests and mine are different, my list would be all but useless to you. Read as much as you can about the places you want to go, get an idea of what's out there, and also figure out what YOU like to do and see. Then when you've narrowed it down, come on back and post a "I love clubs and bars/museums and galleries/out of doors/music/whatever - does anyone have specific suggestions for me" type post. That way, if you hate art museums, you're not going to get a whole big long list of obscure galleries, but will get the best venues for jazz or whatever kind of music you like. Make sense?
Most people making a first trip want to see all the "biggies" - the tourist attractions, famous buildings, artistic masterpieces, etc that make a city/country famous, and that's all good - there's a reason that stuff is famous. But it's always a good idea to leave time to get away from the big cities, out in the country side or at least smaller towns, and get an idea of what daily life in Germany or Spain or Czech really looks like. It's also not a bad idea, on a longish trip, to schedule yourself a little down time - you can get really tired of dragging yourself around the 475th cathedral on your list, and after a while they start to blend all together. Take a trip into the hills and hike around a bit, enjoying the natural splendour of these countries as well - there is great geographic diversity that sometimes gets overlooked on a "European Capitals" type trip.