Madrid vs Andalucía

Not crazy at all. I would definitely add time in Seville. I have not been to Toledo, but a common forum comment is to spend a night in Toledo to gain best enjoyment of the locale. Suggest you check on the dates of the Seville Fair occurring during your stay. If so,this would be a special treat, but may be a burden to finding accommodations. We no longer stay in hotels, unless for only a night (which is rare in our travels), and suggest exploring renting apts. We have found apt rental to be a great value. The web is chock full of apt rental sites, suggest you examine Tripadvisor to determine some recommendations. Invest time into understanding how to reserve your tickets for Alhambra (a must) and also in obtaining tickets via RENFE. The AVE is great and regular class is all you need purchase. Buying tickets via RENFE can be annoying, but a big saver on money. Invest in internet knowledge to learn how best to buy from RENFE. Safe Travels!

Kyle, I'd suggest adding one night each in Granada and Seville (if possible). Both places have a lots of history and lots to see. Visiting the Alhambra could take the better part of a day, between the Generalife Gardens, the Palacio Nazaries and the Alcazaba. The time will depend on how long you want to spend there. For your visit to the Palacio, be sure you're punctual, as they're very precise with the entrance times. The Spain Guidebook has all the details on buying tickets (as well as LOTS of other good information). In Granada you might also enjoy a Segway tour of the Albayzín (the old Moorish quarter) above the town, as it's a lot of fun and also very informative. I did two tours with www.touronsegway.com/segway.htm in June and would highly recommend them. I'd also recommend the Gypsy Flamenco show at Venta El Gallo (many hotels sell tickets). In Seville you'll need at least three hours to see the incredible Cathedral, which is the largest Gothic Cathedral and third largest Church in the world. Be sure to look for the tomb of Columbus (it's in plain view). I would also highly recommend an outstanding walking tour with Concepción Delgado. I haven't been to Cordoba yet, so can't offer any suggestions on that. Happy travels!

My first trip to Spain, I skipped Madrid except for an afternoon and night before flying home. We spent the time between Granada, Sevilla and the white hill towns and had a great trip. We spent 3 nights in Granada and 5 in Sevilla with a day trip to Cordoba from there. If I were to do the trip again, I would likely do 4 nights in both Granada and Sevilla - but that's just personal preference. I also might do at least one night in Cordoba. The Alhambra and Mesquita in Cordoba are amazing...
Expect to return to Spain - I am returning next week for my third trip and it will be the first time I've spent a few days in Madrid.

Yes, it would be crazy to skip Madrid. You have overrated how charming village life may be, and undervalued the reasons (art and sites, that is) people have been visiting Spain for hundreds of years. You did not say if you'll have a car, which makes seeing a variety of Andalusian places easier, if perhaps more expensively. And there's the worry about luggage theft. I can't imagine spending 3 nights in Granada. It's a great place, but does not require three nights for a couple that initially planned for an 8-day (very, very short) visit to Spain. You can get a taste of smaller cities by daytripping from Seville to Carmona (or stay in Carmona, if you can figure out transportation to Seville in the daytime), and staying the night (or a few) in Ronda or Arcos. We happen to like staying in one place for three days, but then you're subsituting day-tripping costs for the Rick Steves sightsee-all-day-and-drive-ON-like-mad system. I think you said in the OP what you prefer, unusual for young, first-timers(?)

Without reading what others have said, so as not to appear to argue with anyone, I like your first plan. Personally, I love Madrid and don't feel that I have had enough time there on my two trips that included it. Even though it's a city, it's not the same city you are from. It has it's own charms, and it's own unique things to see and do.

Clearly, I just need to start planning my next trip to Spain, with two weeks or more of time! For this round, I think we have decided to add a night to Seville at the beginning of the trip, and scale back to two nights in Madrid. This will mean that we miss out on Toledo, but it'll give us more time to adjust at the start and still have a Saturday to explore Madrid. Thanks for your input! We're really looking forward to our first taste of Spain.

My preference would be: Arrive Madrid, go straight to Seville. Seville: 3 nights Rent car in Seville, early drive to Granada via Ronda and other pueblos blancos in Andalusia. Drop car in Granada. Granada: 2 nights Fly to Madrid (or train, although it's not a short train ride).
Madrid: 3 nights, with one day trip to Toledo.

Well there is no right answer since there is way more to do and see then you have time for. Only you know yourself and your interests best, so stick with your gut. Your plan is reasonable. PS - I don't think of Madrid as being a hustle-bustle kind of city. It's no small town, but certainly will feel more calm than NYC.