Assistance with Itinerary please

No, that is a lot of traveling. My first thought is why back track to Portugal to come home? Waste of time and money. It would be cheaper and more convenient to plan you trip in more of a straight line and coming home from Barcelona, Madrid, or maybe even Malaga. It is call open-jaw or multi-city ticketing. I would start there. How many total NIGHTS do you plan to be in Europe, dates???

We are going to be there for 30 days. Originally we were going to go from Barcelona to Italy but have since decided to circle around and spend time at the beaches in Portugal. We are meeting a friend in Madrid and Barcelona so that is why we are there at that time.

Taking the bus to Granada, Seville and Madrid for only two nights seems like an enormous amount of bus time with little time in the actual places. You might want to skip the white villages portion. They are nice to see but add a lot of extra travel for small villages. Also, taking trains or buses from Barcelona back to Portugal will be a long trip. Have you checked out flying between Barcelona and Lisbon?

Sorry. This trip is as rushed as the Portuguese element.

Flying open jaw is a sensible solution. Otherwise, fly from Spain back to Lisbon.

The white villages are best explored by car, so drop these if using public transport.

This itinerary creates the opportunity to have alot of memories of traveling, but not of the places visited. Please consider the following:
Seville - Cordoba - Madrid - Barcelona
Use trains for transportation
Learn how to do a day trip to cordoba while on the way to madrid
Spend the most time in Barcelona
Eliminate the white villages
Eliminate Granada
This itinerary provides efficient travel utilizing one mode of transportation and provides the opportunity to create memories of where you have been (not of how you got there)

Whoa !!! I would not eliminate Granada. Granada is core to the Spanish history. The Alhambra is one of the great historical sites. There are lots of areas in Spain I could skip before skipping Granada. I do think you need a little more logic and order to your travels. Cordoba should be included. Take a map and put some pins in it to see your travel line.

The part that strikes me as the most illogical is Barcelona to White Towns to Portugal. Transit between the white hill towns (I assume you mean the ones in southern Spain, Arcos de La Frontera and such?) and Portugal will be messy. As will getting from Barcelona to them. Skip 'em and fly from Barcelona to Lisbon or wherever else in Portugal makes sense. Otherwise it will be a logistical mess.

Portugal
Sevilla (2 nights as you said - have you looked into how long the bus from Portugal to Sevilla takes? I don't know).
bus or train to Granada (as you said)
bus or train to Madrid/Toledo.
train to Barcelona
fly to Portugal

Do not skip Granada, Seville, or Barcelona. These are key sights. As is Toledo. I would honestly put Madrid a bit lower, but it fits OK. White towns are nice but don't logically fit in your schedule. If you could do them between Seville and Granada that would be nice, but I understand you have to be in Barcelona at a certain time.

Thank you so much guys. I am going to rework some stuff and then see what I end up with.

Drop the White Villages.
Fly from Barcelona back to Portugal.
A night extra in Sevilla & Barcelona.