best way to get there from here...

You can fly from Granada to Barcelona. We did a few weeks ago on Vueling. Fast, easy. No problems. We also took an AVE train from Seville to Madrid - it's only 2.5 hours.

I'm not a huge fan of Madrid so your plan seems fine to me, other than if your flight is late or delayed significantly it will impact your train to Seville (you would want to buy these seats in advance to get the best price).

We stayed in apts during our stay and loved it. Will never do hotels again. Found all on booking.com. I was especially fond of where we stayed in Seville...Overland Suites Catedral.

1. Arrive Madrid - 2 nights
2. Madrid
3. Train via Cordoba to Seville - 3 nights
4. Seville
5. Seville (Pick up car in Sevilla)
6. Drive to Tarifa - 2 nights
7. Day to Tangier
8. Drive to Granada - 2 nights (Return car in Granada)
9. Alhambra
10. Fly to Barcelona - 3 nights
11. Barcelona
12. Barcelona
13. Depart Barcelona

We just booked a flight in October from Barcelona to Granada on Vueling. There are just 3 daily flights, so book that as soon as you can. We opted for the highest class of seat to guarantee room for our carryon bags. By US standards, this was a reasonable cost to ensure we don't have to check a bag.

Kris, I'm looking at your Madrid-to-Seville train and seeing it would be about 3.5 hours. We did a similar length of time when we flew into Zurich and took a few trains to reach Wengen. We grabbed a few snacks at the Zurich airport and then alternated snoozing a bit on the train and walking around on the train - much preferred being at a location to spend the next few days vs. checking out of a hotel that first jet-lagged morning.

Try to arrive in Madrid in the morning, so you could reach Seville by late afternoon.

Have you booked your flight yet? I am going late October and booked to Granada from Canada. It was via Madrid on one carrier then transferred to Iberia as it is in the same Star Alliance group. That way it was all on one ticket. A three hour layover in Madrid, but allows one to get through all the standard arrival necessities, time for breakfast, no need to struggle to the train station and flight to Granada was less than an hour.
Depending on flight options, you could see if you could add a final let go Seville or Granada to your overseas flight.
I would definitely fly to Barcelona.

Thank you all for your replies!
-I will check out vueling as well as flying into Seville instead of Madrid with train.
-Thanks for the itinerary sample
-I hate the idea of 3.5 hrs on the train but I agree that we might as well get all the traveling in on day one!
-any other helpful hints would be appreciated.

The AVE train is only 2.5 hours from Madrid to Seville. I just travelled that route. It's a short (5 Euro) cab from the station to the Cathedral, which is where many accommodations are. It will make for a long day but you should stay awake no matter what you are doing. The more mundane the activity is on the first jet lagged day, the less 'prime' vacation time you would be wasting.

The 2.5 hous doesn't include the time to get from the airport to Puerta de Atocha station to pick up the train. think that's why the OP is receiving varying time estimates.

Trains run hourly.

So looks like we will be in Barcelona for 3 nights, flying to Malaga where we will rent a car and leave it parked in Granada. Then leave Dec. 26th to drive to Seville. it seemed to work money and time wise. Thanks everyone for the help!