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Spain in late May (2013)

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My friend and I will be visiting Spain in May of this year. Tentatively, we plan to fly from the US to Madrid, spend five or six days in a Madrid hotel and then get ourselves to Santiago de Compostela where we will spend four or five days before returning to Madrid for the next leg of our flight.

The "get ourselves to Santiago de Compostela" part is my main question right now.

Our options seem to be: train (daytime) train (night train/sleeper), airplane.
We do not want to rent a car and we do not feel comfortable with a public bus. The train might be a fun experience since we live in a part of the US where there are no passenger trains.

First Question: What tips can you all give about trains in Spain versus flying. We thought we could take the train in one direction and fly in the other direction. This would save time.

Second Question: We want to use Madrid as a base for a couple of organized day tours to places like El Escorial, Avila, etc. Are there any good tours recommended by experienced travelers? Any warnings about day tours?

Third Question: We want to use Santiago de Compostela as a base for a couple of organized day tours around Galicia. Do you have any recommendations/ideas?

We are in our late fifties/early sixties, not physically fit (but healthy)--I'm fluent in Spanish but my companion is not. (This will be our first visit to Spain, but both of us have traveled to other parts of Europe before.)

Thanks for all tips.

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