Spain in October

'Should I consider spending a night in Malaga' - If there is something there that interests you, why not?
However, you say 'a 2 week trip' and then talk in nights and not days and four major destinations and two days of side trips. I would have thought that certainly enough including arrival and departure days.
'Madrid for 3 nights with a day trip to Toledo' and 'Seville for 3 nights with a side trip to cordoba' - 3 nights gives 2 full days when many spend 3 days plus in each of Madrid and Seville.
Have you recognised how much time you are expending travelling accommodation door to accommodation door? A very hurried itinerary for me but maybe that is what you like.

Your overall itinerary is not too bad but I would not recommend visiting Malaga unless there is something there very specific you want to see. You'll easily fill your time in the other places, which are many of the highlights of Spain.

I had no problem converting "nights" into days - as a general rule it is an extra day for every night (3 nights is 4 days). So the amount of time you plan for each destination is about right for a quick trip.

We enjoy Malaga and have used it as a base for day trips, but Do not believe you should add it as a stop over. You have a pretty well balanced agenda so stick to it.

I would not take time away from the number of nights you specifically listed above. Then does that leave 5 - 6 nights in Barcelona, also with time for sidetrips?