Andalusia

If it helps.
'I thought we could get the bus from the Malaga airport to Granada' - some times directly, otherwise you make your way to the city bus station by train, in minutes, or bus and catch the bus to Granada there - www.alsa.es - Are you sure you will be up to it, no jet lag and disorientation in unfamiliar surroundings?
'then somehow get to Seville' - the same bus company, train is www.renfe.com, journey time at about three hours whichever. By the time you have schlepped to and from airports, I doubt there will be any value or time saving in it. Train is centre to centre.
Cordoba can be visited as a long day trip from Seville, less than an hour each away from Seville by train.
'is it worth it to stay over in one' of the Pueblos Blancos. Depends on which of several hundred (including now the blue one) interests you but there is little to do, certainly Monday through Friday, after you have spent a little time on whatever attracted you, apart from eat and drink. Some which are counted are not villages but town size, if they interest.
'Will this allow enough time?' - Do the maths paying attention to the time taken accommodation door to accommodation door, but you could squeeze in a day or two around the villages.

Thanks, Neil.
I checked schedules. We would get into Malaga around noon and the bus doesn't leave for Granada til 6:15, and takes over 3 hours.
Have you been to Seville, and if so do you think a week there would get boring? We spent a week in Barcelona and were very busy.
It seems getting from city to city in Andalusia is difficult and expensive.

The roads in Spain outside the cities are mostly great, easy to navigate with relatively light traffic. Some cities are more snarled. Buses are a great way to get between towns (but won't work well for multiple stops in a day). The train works best for a straight shot between Granada and Seville (and/or up to Cordoba from Seville).

I'm trying to see when you are going? South is great spring or fall, and not bad in winter. If you're traveling in July or August, I'd stay north.

Is a week in Seville too long? Yes, we stayed four nights - but it was during April Fair and we were glad we had the time there. Outside of a special event, I could live with two nights (one full day) to see the Alcazar, Cathedral, surrounding quarter during the day plus walk to the Golden Tower, see a flamenco performance, and maybe a bull fight in the evening.

Granada needs a full day for Alhambra alone, plus another day for the other sights - so I'd recommend a minimum of three nights.

In between, I liked a stop in Antequera to see the passage tombs (free museum and tombs) enroute to Ronda (we stayed a night). Then early drive to Gibraltar (park in La Linea) for the day. Stay in Tarifa (we really like La Torre Hotel outside Tarifa) a night (or two). In the morning, stop at Baelo Claudia ruins (26 km up toward Cadiz) - nice nearly deserted ruins on the beach and museum - costs about 1 euro. From there it's a fairly long drive to Jerez. Stop for a night in Jerez, make time for a couple of Bodega tours the next day before driving to Seville.

'We would get into Malaga around noon and the bus doesn't leave for Granada til 6:15, and takes over 3 hours.' - Presumably you mean your flight arrives at the airport at 'around noon' and the first available bus from the airport will have you in Granada at 6.15.
You are not going to clear the airport immediately and as I said (and if you want to shave time off this) you catch the first train to the city (Maria Zambrano station), running every 20 minutes and less than a 10 minute journey, walk five minutes to the bus station and catch the next bus.
'and takes over 3 hours.' - well I see two and a quarter.

Yes, I have been to Seville on three occasions for three and four days at a time and passed through, seen it and done it. I have no idea whether you could find seven days worth of interest, sorry I am not you.

'It seems getting from city to city in Andalusia is difficult and expensive.' - Sorry, I do not get that at all. You have straightforward routes between cities and followed probably by at least tens of thousands each year. Relative to your flight costs and the distances you will cover, per head it must be negligible expense.

Brad:
We are going the end of Oct., but have not yet purchased tickets.
Antequera looks interesting.
Thanks for your tips.

Neil:
The bus from the airport leaves Malaga at 6:15 and arrives in Granada at 9pm, making a very long day as we will have been traveling over 24 hours by then and I am a wimp when tired! Thanks for replying.

Back to the drawing board.

Neil, I checked that website for the bus and see that they run frequently, thank you.
I haven't figured out how the train website works yet, but will keep at it. It never brings up a price, but I did get it to stop switching to Spanish. It must be free!
Yes there will be jet lag and disorientation. We don't want to appear as demented as we are to the kids!

I rented a car to see some of Andalusia - mainly the pueblos blancos. I used Ronda as a base and was very happy with that choice. I loved Ronda and enjoyed driving through the hills and stopping to see other towns as day trips. I rented a VW Polo (manual transmission) which was pretty easy to drive in the narrow, steep roads in the pueblos. For 4 adults you'd definitely want a larger vehicle, both for personal comfort and to accommodate your luggage (you should not leave any items visible in a parked car!). Outside the historic centers of the towns, driving is easy, the roads are quite good. So when you get to a town, leave the car in the first parking spot you see and explore on foot.

If you can get over the group dynamics of sharing a car, it would be the best way to see Andalusia, I think. Drive from Granada through Antequera to Ronda etc. and end in Seville/Cordoba.

Cordoba is an easy day trip by train from Seville; however, I found Cordoba more charming at night than Seville.

I suggest you look into open-jaw tickets. It may be worth paying more to maximize your sightseeing time. . . for instance, flying home from Seville rather than using the better part of a day to get back to Malaga from there.

Lastly, go to the TripAdvisor forum for Spain and read the long, detailed instructions for using the train http://www.tripadvisor.com/Travel-g187514-c80518/Madrid:Spain:Buying.Renfe.Tickets.Online.html You can save a lot of money by buying tickets 2-3 months in advance.