Our big splurge hotel on a recent trip to Spain was the Alhambra Palace in Granada. And, honestly, compared to prices in other parts of Europe, it wasn't that bad. The views of the City stretched out below our window were wonderful. Plus, it's an easy walk down to the Plaza Nuevo and all the sights in town. It's also right next to the Alhambra so the walk is a breeze.
I also add a big "yes" to all those who recommend Amadeus in Seville. It's in the most interesting part of Seville, an easy walk to all the sights. Skip the expensive breakfast and walk down the block for churros and chocolate with the locals. We stayed in "the attic" which has a semi-private terrance and is a few steps from the rooftop tables. A great choice.
Don't forget to download Tripadvisor's Seville City Guide. It works off line once it's downloaded and is a great help.
Have a great trip.