Last November, we didn't go as far south as Granada, but we still used 2 separate rental cars (both from Europcar), as well as trains, buses and planes. As Chani described, cars are expensive and sometimes a burden in big cities. After a week in Madrid without a car, which included a day trip out to Toledo by train, we headed north by train, then picked up a car in Bilbao for a few days. We then flew from Bilbao to Barcelona before taking a train to Girona, where we picked up another car. True, we missed the flexibility of stopping wherever and whenever we might have wanted along the way, but with the places we wanted to see, we were focused on speed, price, and those specific places, not literally covering a lot of ground in between. When we did have the cars, it was really helpful for getting to smaller places on our own schedule, but parking was particularly expensive 2 nights in San Sebastian, and we hadn't really anticipated that.
The International Driver's Permit, needed alongside your regular driver's license, provides a translation of your license for any cop who might be loking at it, so speaking Spanish isn't necessary in that situation. Hopefully, of course, you'll never need to be showing it to an officer while you're over there, but at least you'll have it if you need it. The highways were efficient and well-marked, but inside towns with narrow streets and not-always-easy-to-follow signage, it was more challenging.
By the way, Vueling Air provides a relatively inexpensive and very fast (even with going to the airport, checking in, going thru Security, etc.) way to go between cities in Spain, so, if you're looking fo a way to get directly between Granada and Barcelona, for example, they may be worth looking into.