Family Travel Input

Better to take the train. Trains are easy all along the coast. If you do go to Cadaques you'd take a bus. Your trip is short enough that driving along the coast would take up time I would rather spend in one of the locations you mention. If you do decide to keep the car, I would return it in France, take a train to a destination in Spain (Figueres? Girona?) and rent a different car there so you avoid the fee for crossing the border.

First part looks fine ... after France, take the train to Madrid and spend the 3 days there ... taking trains can get expensive with 7 people and renting a car for those 3 days (really more like 2 days after all the car rental stuff that needs to happen) sounds like more of a hassle (and a waste of valuable touring time that is consumed by driving) ... if you want to drive around the Barcelona area for a few days, get another car there and avoid any drop-off fees or issues with taking a rental car between countries.

I wouldn't go all the way to Madrid on a short trip like this with kids young enough to need a nanny. The main reason to push on to Madrid would be to overdose on art in the museums, and those aren't going to be popular with most young children. I think the original idea of the Costa Brava and Barcelona is better in this situation.

Just a warning that you might need two cars with that group size, especially if any kids are in car seats. You need to consider how much luggage you will be bringing. We own a minivan, and fitting 7 people plus luggage would be difficult unless everyone packs REALLY light. Minivans are not as common and are extremely expensive. Driving (especially parking) a minivan in Europe is much more challenging than in the US, with tiny streets and limited parking. One way fees to pick up a car in France and drop off in Spain can be very, very high. IF you rent a car, return it in France and continue to Spain by train.