Hitler and Nazi Party leadership as a whole from the aftermath of the Battle of Stalingrad onward is marked by a gradual decent into fanaticism and delusion. From Hitler's unwavering belief in the "sheer will to win" and his growing distrust of the Wehrmacht and his generals to Joseph Goebbels infamous Sportpalast Speech and his sponsored Werwolf plan to wage a resistance war, Hitler and his inner circle believed in Endsieg, or Ultimate Victory, even as the Reich collapsed around them.

The start of this descent into madness can definitely be seen in Goebbels Sportpalast Speech in February of 1943, where in front of a selected audience, Goebbels asked Germany to prepare for total war, that Germany and Europe was in danger from the Soviets in the east and decisive action needed to be taken immediately to counter the threat of Bolshevism. The speech was setting the tone for the German war effort after the defeat in Stalingrad, playing up apocalyptic rhetoric in order to counter the enemies Nazi Germany made in its pursuit for conquest, and was only fueled from there in further radicalizing the population and soldiers.

The start of Germany's grand plan in 1943 was to regain the initiative on the Eastern Front by attacking a salient at the city of Kursk. the attack on Kursk commenced in July of '43 and was a total failure. Germany lost 200,000 men and all initiative and momentum for the rest of the war. Although some political leaders and generals hoped that a victory at Kursk would bring the Soviets to the negotiating table for a separate peace, this was never a reality as the Soviets accepted the Casablanca Declaration in January of 1943, a declaration to accept nothing less than Unconditional Surrender from the Axis nations. From that point on in the Eastern Front, all Germany could do was defend against the advancing Soviets, which became an increasingly impossible task as the Soviets steadily advanced towards Berlin.

From there, German plans to obtain their victory rested in repelling an anticipated Allied invasion of France, hoping that defeating a major landing would force the Western Allies to pursue a separate peace in favor of Germany. This never came to be as the Allies successfully landed in Normandy and began the liberation of France. After that failure, the Germans' counteroffensive through the Ardennes in December of 1944 was intended to break through and capture Antwerp, encircle and crush the main Allied force on the Western Front and again try to force a separate peace, but the Battle of the Bulge also ended in complete failure.

When it comes to the crazy plans thought up, the main two consist of the Volkstrumm as you mentioned, a reserve army under personal control of the Nazi Party rather than an arm of the Wehrmacht, was created to mount a resistance against the advancing Allies. But out of the millions of potential soldiers that could be conscripted into the Volkstrumm, barely half of them were physically fit enough to put up an honest fight, and even less could be properly equipped for battle. The other program being the Werwolf program, intended to create a resistance force that would fight behind enemy lines in tandem with the Wehrmacht on the front lines. In the end though, Werwolf was more propaganda than actual threat, with pro-nazi resistance achieving little more than a few hit-and-run attacks throughout 1945.

As for what the Nazis were holding out all this time for, it wasn't much holding out for something but the hardened belief in no surrender as to avoid the perceived humiliation of Germany's defeat in 1918; or if leaders were sufficiently fanatical/delusional, a genuine belief in Endsieg. As for officers and leaders who did have cooler heads, most were aware of the unspeakable crimes committed both in the Eastern Front and from the Holocaust, and that surrender would almost certainly mean execution by the Allied forces. For them, the decision to fight on was because there was no other alternative but either hang from Nazi or Allied ropes.

As to why holding out for any kind of separate peace simply wasn't in the cards, look no further than Nazi Germany's conduct during the war. A nation that launched a war of naked aggression against all its neighbors, blatantly broke or dishonored every single treaty it signed with foreign powers, forced entire populations within their occupied territories into slave labor, and exterminated anyone they deemed unworthy of life. Any kind of peace treaty signed with Nazi Germany wouldn't be worth the paper it was written on with their history of blatant disregard for good faith or conduct on the world stage. The Allies' purpose in accepting nothing less than unconditional surrender was to send the message that defeat in the war would be no one's fault but those who perpetrated the war, unlike previous German attempts to pass the blame for defeat on treachery or a stab-in-the-back.