Nerja,Spain

Janie, have you picked up a copy of Rick's Spain book, and done some reading about the area around Nerja? Rick does a great job of covering that area. With a car, you can do some wonderful exploring. You are very close to Gibraltar and Tarifa (and Tarifa is a great jumping off point to Morocco). You are also only a couple of hours away from Granada.

There is Malaga around 40 mins away, Marbella ( 1 hour ). You could do both in one day or do them on separate days depending how much time you want to spend in each place. You could technically do a day trip to tangier from Tarifa ( 2.5 hours ) away and take a ferry from there, Gibralter 2 hours away, Ronda 2 hours away , Definitely do Granada around an hour away to go see ALhambra. Renting a car would definitely help so that you can wander off if you want to.

I would definately recommend renting a car for some of the time. Nerja is lovely and we know it well as we live only about 40 mins away. We didn't think much of Tarifa but it is a good jumping off point to Morocco. The beach village nearest Nerja is Burriana which is quite nice. The old part of Malaga is nice - but don't attempt to drive into Malaga would be my advice. Marbella is rather 'flash' with very upmarket shops and expensive cafes. I would agree that Granada is a must see - and the Alhambra but book your tickets online ahead of time.

Keep an eye out to see if any music concerts are scheduled for that time period in the nearby caves in Nerja. As for renting a car, does your home base include free parking? If yes, rent the car for the whole period. If not, rent the car for the 2nd week and plan out your day trips between what you can easily do by local bus (like Malaga) or by car (hilltowns, etc.)