It does depend somewhat on what your vehicle is and what your comfort with relatively back roads is. I can't speak too much for the Indiana to Niagara Falls portion, except to say that I would be mighty tempted to go via Canada. Obviously, that requires the appropriate passports, paperwork for the dogs, etc.
From Niagara Falls to Bar Harbor, there are at least a couple of options, depending on one's time, one's vehicle, and one's comfort with hills and curves.
Fast, easy, rather boring, and toll-laden: I-90 to I-290 to I-495 to I-95. There isn't any really terrible city driving on this route. New York has some very pretty state parks in the Finger Lakes region (e.g. Letchworth, Watkins Glen).
Slower and hillier and curvier and more interesting: I-90 at Verona (near Rome), NY 365 to NY 8 through the Adirondacks to 9N to 17 (across the bridge at Crown Point) to VT 22A north to US7 to I-189 to I-89 to US2 at Montpelier. Alternately to I-90, you could take NY 104, or take NY 18 and the Lake Ontario Parkway (but beware of height and vehicle limitations on the latter). Last time I was on it, maybe a year ago, some parts of the parkway had extremely rough pavement; following 18 where they are parallel might be better. The various expressways through Rochester are not a whole lot of fun to navigate, particularly if you aren't super familiar with them.
Yet another alternative may be to follow the Great Lakes Seaway Trail and then take US 11 to US 2. I have not travelled most of this route through New York myself.
