Advise - 1 night stay in Toledo & Cordoba Vs. Day trip?

Since you have to travel from Madrid to reach Toledo, I'd do it as a day trip to avoid changing hotels.

Cordoba can be a day trip from Seville, but I recommend staying overnight. I enjoyed the evenings there more than anywhere else in Andalusia. You may be able to leave your luggage at the Cordoba train station and take just an overnight bag to make getting to/from the station easier. You can see the main sights in one day.

You didn't say what you are most interested in. I would first define the things you really want to do/see and then the days will fall into place.

Madrid is full of art (Prado, Thyssen-Bornemisza Museum, Reina Sophia). For me, I would skip Segovia and focus on Madrid. Also, don't disregard the effect of day trips on your evening plans. Nothing starts at night in most of Spain until after 20:00 and Madrid has great night life.
Toledo is an amazing place with IMHO the most beautiful interior of a cathedral I have seen in Europe. An great town to walk around in.
I would day trip Cordoba from Sevilla. Cordoba is a great place, but for a short trip I think moving your accommodations for 1 night not worth it and it is a short trip on the AVE.
Grananda, apart from the Alhambra is not that impressive, kind of touristy.
Barcelona is an amazing city. Gaudi was a genius. The Sagrada Familia is worth the price, both in time and money. Palau Guel is a masterpiece. Figueres (I assume you are going for the Dali Museum) is definitely worth the trip.
We love Spain and hope you will too. Have a great time!

Toledo as a day trip, and Cordoba as on overnight (cause you may as well get off Sevilla bound train on the way).
Personally I would have done Granada (2) and Barcelona (4), especially in August when Barcelona's abuzzing.

Thanks djp_syd - Are there anything more to see apart from the spectacular Alhambra. Regarding the Barcelona - what are things buzzing in Barcelona in August? My plane tickets are only set in stone rest of itinerary can be tinkered with longer

Madrid – 3 nights
Saturday Aug 15 – Arrive Madrid @ 10.15 am
Sunday Aug 16 – Excursion by bus to Segovia
Monday Aug 17 – Excursion by AVE train to Toledo

Cordoba – 1 night
Tuesday Aug 18 – Travel to Cordoba lunchtime

Seville – 2 nights
Wednesday Aug 19 –Travel to Seville after morning visit to Mezquita
Thursday Aug 20 – Explore Seville, visit Cathedral & Alcazar

Granada – 2 nights
Friday Aug 21 - Travel to Granada late afternoon
Saturday Aug 22 – Explore Granada & visit Alhambra

Barcelona – 4 nights
Sunday Aug 23 – Early flight to Barcelona
Monday Aug 24 – Explore Barcelona
Tue Aug 25 – Day trip to Figueres & Girona
Wed Aug 26 – Explore Barcelona

Thursday Aug 27 – Fly to US @ 10 am

My strategy for Granada would be to visit the cathedral the afternoon you get there. Dine at a restaurant high in Albaicin with a terrace and spectacular view of the illuminated Alhambra. Next day start in Albaicin and the Arab baths before your Alhambra visit (try and book tickets around 1pm).

August in Barcelona is hot and sticky, so the beach is a big attraction. Lots of young people around so the bars are lively. The city itself can be quieter in a commercial sense with many people on vacation. Enric may shed more detail (please).

Thanks Chani, Djp_syd and Stephen for wonderful suggestions. I will overnight in Cordoba makes sense as it is on way to Seville.I am leaning towards overnighting in Toledo depending on finding a decent hotel for 3. All the nice charming hotels are limited at 2 adults.

I also like the idea of shortening a day in Granada and adding to Barcelona as my son would love the beach part.

I think an overnight in Toledo is good - leaves you time to explore at night, when it is less crowded.

I also agree with shortening Granada in this case - but I want to defend the city in general ;) It's one of my favorite places around. Outside of the Alhambra and the Cathedral/Chapel there's not a ton of attractions, but there's a great atmosphere. Wandering around the Albayzin is magical, the whole place just has a feeling about it. I just can't describe it. It's a place to wander, to just experience. So in your 2 nights give yourself time for that!

Thanks Mira - I found a decent hotel in Toledo so would enjoy the charming city for a day and a half. i am still researching the same for Cordoba- my favorite Vieneto 10 is booked for the day i want. Good point - I will maximize the time in Granada or probably book my hotel in Albayzin. The extra day given to Barcelona- i can enjoy my stay leisurely checking the great spots.