I'm just starting to plan my trip to Spain for next year (looking at April). The general idea is to fly into Madrid, and focus on Andalucia. I'm not sure of the exact itinerary, yet, but I think this particular trip would benefit from a rental car instead of trains/busses. Do you agree? Also, I've never driven outside the US/Canada. I know some Spanish and will brush up, but it will still be basic. How is driving in Spain as far as signage, agressiveness of drivers, road conditions, etc. Also how is parking at hotels in town centers? I'd probably drive to the hotel, leave the car when touring that city, use the car for day trips, then move to a new town.
Spain has the second most extensive freeway network in continental Europe and there is no crisis in building activity. In Europe, anywhere, signage is more pictogram-based than text-based, which means they use symbols and colored plates instead of things like "Right lanes MUST turn right" or "Snow Chains Compulsory Beyond This Point". Take 30min in any website to familiarize with some different signs, particularly the native version of "no traffic allowed", speed signs and directions (blue circle + arrows). Highways are overall better in Europe than in US (pavement, signaling). Rules of road are more or less the same, with one big exception: no red light right turn. Ever. It is absolutely better to take a car instead of relying in public transportation for the trip you want to take! As for parking: not all town center hotels have parking, some will have parking and an off-side location or direct you to a public underground garage.
If you are focusing on Andalucia, I think a rental car is a great idea, although it can be done by bus. The trains in Spain are typically more expensive and have more limited schedules than the rest of Europe. I would take public transportation from Madrid to Sevilla and rent a car there...it's a good starting point. Wait until you're on your way out of the city, as anything you want to see in Sevilla can be seen by public transportation or by bike or on foot. Drivers aren't particularly agressive, but they are certainly less cautious than American drivers. Things are normally well marked, but make sure you have a general idea of where you are trying to go because exits from highways and roundabouts are usually more confusing than here in the US.
Excellent decision, driving in Spain is a pleasure. We put on over 4,000(k) in 2010. You can stop and go anywhere - check out the sights and move on. The drivers are excellent and so are the highways. NO beat up old cars and the far left lane is for PASSING not day dreaming. Lots of the signage is in English, that really amazed us. Take a GPS and and a map/atlas and PARK as soon as you enter a large city. There are secure underground parking lots everywhere and (in the excitement) do make a note of where you are parked! In Seville we stayed at a hacienda that was only accessable by car. What a great place and only a 30 minute drive into the heart of the city. Enjoy your trip.
Your plan sounds excellent. Driving in Spain is not a big deal, you'll do fine. The only quibble I'd have with your plan thus far is that I would suggest mixing things up, doing portions of your trip by train (probably most of it), and other portions by car. A car in the major cities/old cities will be an expensive headache, and many of the top attractions in Andalusia are very nicely connected by fast trains, making connections a snap. OTOH, a car is necessary to do the White Hill Towns, for example.
Driving should not be a huge problem... but finding your way to parking in the villages will be the same problem as any city in the US... sometimes you have to keep circling around till you find a spot. It is beautiful countryside to drive through and signage is good. Just remember that most rental cars in Europe are manual and if you need an automatic you will have to find a rental company that will guarantee that (and it will probably cost more). Just check out which hotels have parking and be sure and book those.
I did that last year and everything was fine until I got to the cities. I might do it again if I had a GPS - I didn't - but even then it would be with trepidation because of the one way streets and limited parking. Get detailed instructions from your hotel on how to get there and where to park. Also find out what the parking will cost.
When we drove in Italy, I had the same problem transistioning from highway to city, our map covered the major routes plus street maps of the center, transitioning from one to the other was difficult - so I came home and bought a GPS. Most people seem to agree signage is worst in Italy, so Spain should be at least a little better (we're picking up a car in Barcelona Apr. 5th). We'll bring a GPS and map. Elsewhere in Europe it's been pretty easy, follow the signs to the center, when you get close follow a P sign to parking. Road conditions are generally fine all over Europe. The big difference is in very old centers, the roads were built long before anyone thought about driving cars. The areas are generally compact, so it's best to find parking, and set out on foot, rather than try to navigate the tiny, twisty roads.