How do I best accomplish this?

Toledo is easily a day trip. Granada is 4.5 hours by train. Sevilla is 2.5 hours by train. Cordoba is a little closer - just under 2 hours, I think. Barcelona is about 3 hours on the train.

Remember that you have to get from your hotel to the train station and from the train station to the tourist attractions - allow another 1/2 hour at each end.

Is there any way you can change rental? Maybe rent in 3-4 locations for 7-10 days each?

With this group of kids along, you will prefer direct train departures (no connections). In addition to taking 4.5 hours each way, the only direct Madrid-Granada trains depart at 9:00, arrive Granada 13:30, and depart back at 18:00, leaving you less than 5 hours in Granada.

If you made each trip only one way in a day, then a Spain railpass would not save money. The pass (starting at 3 travel days for $254 for and adult) would be a good value if you do plan to go roundtrip in a day on a few of the longer routes. A pass doesn't help on a short train such as Madrid-Toledo, since a regular ticket doesn't cost any more than a passholder seat reservation fee.

Toledo is an easy and direct train ride from Madrid. I visited last July with my family, and we made arrangements to meet a tour guide named Almudena Cencerrado who was recommended in Rick Steves' Spain 2013 book--was he spot on! She was incredibly knowledgeable, and very sweet with my kids. http://www.tourhq.com/guide/es72301/almudena-cencerrado
Good luck and have lots of fun!

Thank you for all of the comments.

Our apartment is near the Palacio Real and we will really be mostly focused on Madrid. We will visit other towns as we can but I wanted to have a home base. Toledo sounds like an easy day trip. I think Segovia can be too. And, El Escorial.

What about buses rather than train? Do they take much longer? Are they more or less expensive? Where is the bus terminal for longer rides like to Seville?

It sounds as if we should just plan to stay overnight in Seville and Granada and Cordoba. In what order does it make sense to do these originating and returning to Madrid? Can you recommend a place that will work for one adult with four children in those cities? The same for Barcelona.

Thanks,

Cecily

I'd put Seville and Granada together. Train to Seville, spend the night in a hotel. Bus to Granada. MAKE SURE TO RESERVE TICKETS in advance for the Alhambra! (I'm going to say at least three weeks in advance) They will give you an entrance time, and you need to be there on time! As you describe your kids, this may be their favorite site in Spain! It is mine. You can google it, but the pictures don't do it justice! You can join a tour group, and then wander the grounds and gardens at your leasure afterwards, it is Stupendous!

In Seville, we used the fantastic Conception Delgado (in the RS book) She is unbeatable! She loves her city and it shows. We were three people who were part of a 10 person group, and it was reasonable financially.

This will take you away from your Madrid apartment for a few nights, but I don't see a better way to do it. When I went we landed in Barcelona, flew to Granada, bussed to Seville and trained to Madrid -- but this isn't an option for you with four kids probably!

Thank you for the really helpful replies!