Tani, that's what I would do. The reason is that almost all trains (as far as I know) from Toledo stop in Madrid. So to get Toledo to Seville, you'd take a train to Madrid (40 minutes?), then change trains for Seville. Worked for me, but you could do Madrid first, then Toledo, then train to Seville and so on. Doesn't really matter. But I do advise thinking strongly about the train, whichever order you pick.
Usually, train stations are pretty central. Sometimes hotels are within walking distance, sometimes there is a bus or subway, sometimes there is a short cab ride. It might cost 10 Euros? Varies, but I've never seen one be too expensive. There are ALWAYS cabs available at any train station, certainly all the ones you're taking about! There are usually hotels very near the station, but that may or may not be the area you want to stay in. Just stay in the area you prefer and take a cab, bus, or walk depending.
Let's take Toledo for an example...train station is about a mile from the hotel I stayed at last time. Walkable, or a cheap cab if you have luggage or don't want to walk. It is a heck of a lot cheaper to take a cab to your hotel than to pay for parking! I don't usually drive much in Europe, but I did on one trip through Southern Spain to reach the hill towns etc. I stayed in Seville, in the old section for 3 nights (Barrio Santa Cruz, IMO best area to stay in Seville). Hotel had no parking (very common, there is just no room for parking in these areas!), and there's no way I would have driven in those streets anyway - they don't look wide enough for a car! So I parked my rental car for 3 days at a garage outside the old section. I think the garage was between 15-20 Euros a day for three days. Add that to the rental car fees and super high gas prices...this is why most European travelers don't use cars for city trips.
A car is useful when visiting smaller towns, going off the beaten path, etc. But city to city, trains almost always are easier and cheaper, and you're not going to drive around Seville, Toledo, Granada, Madrid, etc. You are going to park it and walk or take transit - there is practically no parking outside any of the tourist attractions or things you will be doing, so your car will be sitting in a garage costing money. Again, I don't know about Northern Spain (except Barcelona, no car needed there), but for the places you listed in the south and center...not useful, IMO.