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Spain and Portugal transportation options--2 weeks

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DH and our 3 kids (5, 7, 10) are adventurous travelers, pretty flexible, and used to hot weather. We will be flying into Barcelona in July and after a few days there, are planning the following itinerary (note: DH and I have spent a week in Madrid previously):
catch overnight train to Granada
1.5 days in Granada, catch bus to Tarifa
day in Tarifa, with day-trip to Tangier
bus to hill town Arcos de la Frontera
bus to Sevilla (2 nights)
bus to Algarve
train to Lisbon

Questions:
-recommendations for accommodations?
-get rail pass? rent car?

I know this is a pretty ambitious itinerary--our family likes to be on the move (last summer we did Vegas, Zion, Bryce, Grand Canyon in a week!) Would appreciate any insights or advice. Thank you!!

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