If you make your home base in Osaka, it's also possible to fit in a solid day of sightseeing in Hiroshima and Miyajima, if you get an early start. It takes 90 minutes to get from Shin-Osaka to Hiroshima by shinkansen.
During the entirety of my week in the Kansai region, I stayed at a hotel within walking distance of Shin-Osaka Station (a major shinkansen hub) and from there I made trips to Osaka, Kyoto, Nara, Himeji, Takarazuka, and Hiroshima/Miyajima. As Amped mentioned, most of these places are close together; from Shin-Osaka Station to Kyoto Station it's only 15 minutes by shinkansen.
For me personally, Tokyo is a necessary part of any trip to Japan, but that's because of pop culture and shopping. If you're mainly going for traditional culture and have only a week, Kansai is definitely the way to go.