In Madrid we spent two nights at Hostel Ivor - our first time in a hostel as a family - and it was perfect. As I've mentioned before, hostels are not the shabby, drunk-backpackers' havens they used to be. Our room for 4 had A/C and an in-room bathroom with shower. The location on a quiet pedestrian street was a block from the Puerta del Sol. Our Spanish-style apartment in the heart of the Seville barrio was dreamy - we didn't want to leave. And now, at Hotel America, one of only two hotels inside the grounds of the Alhambra in Granada, it is a scenic paradise.
Trains have been timely, taxis plentiful, monuments have been open, food (and sangria!) has been terrific, and the Spaniards are so kind and helpful. Having a great time - wish you were here.