That's great, thank you! I've read about the fireworks on NYE. It's actually a bit of a coincidence that we'll be there then (it was the only date range that worked for us to get away) but really looking forward to it now. Northern lights are number one on my list of things-to-see. Whales are number one on hers, so our plans over there will likely be:
31st Dec: Hotel is near Perlan so we'll watch the fireworks from there
1st Jan (and onwards if necessary): Northern Lights (during the day we'll bum around Reykjavik & maybe Blue Lagoon)
2nd Jan: Golden Circle Tour
3rd Jan: Whale Watching
4th Jan: Undecided - maybe Silfra / South Shore / Something else!
Should be good for a first trip, anyway 
Will deffo check out the hotdogs. I've heard the food isn't great in Iceland in general though!
Sounds like a decent plan. Whale watching wouldn't take more than 4 hours all round, so you'll still have half a day left. Reykjavik downtown is rather tiny so you'll be able to see everything on foot. It's really beautiful. Climb up the Hallgrimskirkja for some beautiful city sights.
I thought the food was fantastic. You may have to be open to a bit of experimentation though. Try the arctic char, if seafood is your thing. I've never had a less than fantastic experience with the fish of the day/soup of the day at Ostabudin, anything I've eaten at Café Loki, some fantastic cinnamon buns at Braud & Co., and arguably the best Asian noodle soup that I've had in Europe at Noodle Station. There's also various other delicacies like dried fish, fermented sharks, puffin meat and the like (Loki's "Icelandic braveheart" tests your resolve with -IIRC- dried fish, fermented shark, sheep head jelly and a shot of Brennevin!).
I'd also recommend visiting a public swimming pool for the hot baths instead of Blue Lagoon. Baths are like bars in Iceland. They are a great place to get talking to locals on a weekday evening. A lot of tourists do tend to go to the Blue Lagoon near the airport, but it's way too touristy and terribly overpriced at around 60 Euros. We gave it a miss and tried a local pool one evening, and ended up going to 4 other public baths in our visit. Costs around 10 Euros tops. Pro tip: Nautholsvik is a pool on the Atlantic Ocean, you have a hot tub overlooking a lagoon which connects to the ocean. Run to the lagoon for a 5C dip, brave a dip into the ocean at negative temps and run back to the hot tub for a 40C soak. I gave it a try and was quite a spectacle amongst the locals there
