"You really need 2 nights or more for Granada"
Yes, and here's why. Even if you only want to go to Granada to see the Alhambra, the logistics of this mean that you will want to get to Granada the day before your Alhambra reservation. It then takes a good part of a day to see the Alhambra. So, even if you arrive late on day 1 and leave early on day 3, that's two nights and 1 full day to see the Alhambra properly (although this schedule does work). If you want to see any other things in Granada, you need more time than this.
If you take day trips from Seville to Cadiz and Gibraltar, when will you see Seville?
In a short trip, focus on the A-list. Unless you have a special interest or reason for going, places like Malaga, Cadiz, and Gibraltar are not priorities on a short visit - so drop them, and have more time for biggies like Madrid, Toledo, Granada and Cordoba (which you should probably see on the way to Seville). If you've seen some of these places before, that's different.