Raillway Pass or Point-to-Point

Look closely at the travel times for the various types of trains
Sometimes, the INTERCITY or ALVIA are only a few minutes slower than the AVE for a significant price difference.

Time of day can make a large difference in price.

Buying in advance can save money.

I'd be surprised if the point-to-point tickets were not cheaper if bought well in advance to take advantage of promo pricing. Those tickets will be non-refundable/non-changeable, so you need to be sure of your plans before buying. For Toledo there is no price advantage to buying early, but I think a round-trip ticket is a big saver over two one-ways. Probably best not to wait till the last minute to buy the Toledo ticket, because those trains do occasionally sell out. Also, Atocha Station is a bit confusing to some of us, and it might take you some time to figure out which ticket machines (or ticket windows) sell tickets to Toledo.

If the pass you are considering is the Renfe Spain Pass (hope I have the right name), proceed with extreme caution. At least one person has reported having a lot of difficulty turning that pass into actual tickets. I'm sorry that I don't remember the details.

If costs are breaking even, a pass can make sense in countries where most trains don't require seat reservations, but that's not the case in Spain! Your trains will all require seat reservations, whether included in the price of the ticket or secured before boarding the train with a pass. So you don't gain any particular convenience. See more tips at https://www.ricksteves.com/travel-tips/transportation/trains/spain-rail-passes, including:

For seniors age 60+, buying a Tarjeta Dorada in Spain allows you nice ticket discounts on short notice, although not as deep discounts as you can get if you're willing to lock in dates and times further ahead.

With a Eurail Spain Pass: Options currently are 3, 4, 5, or 8 calendar days of travel within a month. Reservations cost extra $10-20 in 2nd class and sometimes more in 1st. Between Madrid and Toledo, you say you're not looking for fast trains but that's what actually runs and the passholder seat reservations cost the same as just buying tickets ($15 each way) so the pass doesn't help you there.

With a Renfe Spain Pass: The whole count is different. That pass counts train segments, rather than calendar days of travel. I believe reservations are free but that they must be made online and in chronological order of travel.

Not to hijack this topic, but I am wondering if contributors can tell me if it makes sense to buy a railway pass for all or part of a trip when there is a long segment for which I can't purchase tickets in advance. Our plan is to take a train to Sevilla the day we fly into Madrid. Its risky to prepurchase these tickets because you never know what can happen with plane delays. (Case in point, I sat in New Orleans airport yesterday on a 7 hour delay!!)

Jules, I took a quick peek at the Renfe website, and promo tickets for early September currently cost €35 (don't know whether they are ever lower than that), whereas today's tickets go up to €76. Both those fares include seat reservations. And two of the afternoon trains are already full. It appears that waiting to buy the ticket until you get to Madrid has its own risk.

As for the rail pass, note what Laura said about the cost of the mandatory seat reservation. Waiting to pay for the seat reservation until after arrival in Madrid would also risk running into sold-out trains. The cost difference between buying a promo ticket ahead of time and buying just a seat reservation ahead of time looks like it's about €20 per person. And you wouldn't have the substantial expense of the rail pass. But you'd need to look at the pricing of all your planned trips, not just the initial leg to Seville, to do an accurate comparisom.

Thanks for all the great information. I have oodles to think about, but I now have a logical process to research. Thanks for all information.

Jon