Cathy: First of all, I congratulate you on your decision to visit the north. It is one that will reward you greatly. One itinerary we did a few years ago required the services of a rental car. I suggest you rent a car, as train service along the Biscayan coast can be confusing, and riding a bus through Asturias can be nauseating...
We started [of course] in Madrid, and drove northwest to Galicia, stopping in Salamanca for one night, then on to Pontevedra. I suggest that you stay in Santiago de Compostela, and spend at least 2-3 days just exploring the old part of the city. La Coruña is nice, but getting there was more fun than actually being there. There are a number of small manor houses known as "Pazos" in Galicia. You can check them out at
www.pazosdegalicia.com . You may find the lodging luxurious, and in September, inexpensive by comparison.
We then drove east through Asturias. Although the whole of Northern Spain is beautiful, Asturias is by far the most pristine, stress-relieving, breathtakingly spectacular region in Spain. A caution to the faint of heart behind the wheel: The main west-east highway is two-way traffic, with multiple mountain switchbacks. It would be a nice "Lexus commercial" drive if it weren't also used by commercial delivery trucks...passing a truck on a switchback is a harrowing [and necessary] experience.
We stayed in Avilés, but only because we have friends there. I recommend a smaller stopover like Llanes, Luanco or maybe Cangas de Onís. If you stay at Cangas, you can spend the next day exploring Covadonga, which is absolutely glorious.
Traveling east to Santander, you may be able to find a good casa rural in Santillana, as you had hinted. Santander is a lot like Asturias, but a little less mountainous.
Ten years ago I would have never recommended Bilbao as a tourist destination, but that has all changed. They've drastically improved the city, and it is every bit as cosmopolitan as any other great European city. The metro lines have improved mobility, there are several high-class reasonably priced lodgings, and then the attractions. See the Guggenheim, not necessarily for the artwork inside as much as the building itself. The Begoña cathedral is terrific, and the old quarter of Bilbao is charming, especially in fall and on towards Christmas. From Bilbao, you have the following great side trips at your fingertips: Bermeo [fishing village with polychromatic housefronts along the waterfront]; Gernika [spiritual heart of Euskadi, historic governmental center]; San Sebastián [everyone's hands-down choice for most beautiful beach]; San Juan de Gastelugatxe [monastery on an island in the bay of Biscay]; Butrón [local castle]; and many more.
Drive on to Pamplona, which regardless of the season, rewards the visitor with history, Hemingway notwithstanding. There is the plaza de toros [work of art], the old city walls and Ciudadela park, the cathedral and one of the most intriguing and historical old quarters in Spain. Near Pamplona you can get to Olite, a city-castle-palace which is now a parador [stay the night!!!] or go up the pilgrim's road to Roncesvalles. While you're there, stay the night at our family's casa rural Casa Kurutzezahar. Check it out at
http://www.toprural.com/ficha/index.cfm/idp/31/ids/740.htm . MM: This isn't a shameless plug, it just happens to be a great place to spend the night!!! Make your reservation early if you plan to stay there though, especially for that time of year. They may only be available certain months, and summer is always "completo".
Making your way back to Madrid is easy and you have a few great choices of places to visit on your way down. I'll let others add their 2 pesetas worth on that...
Enjoy your trip, and if you do happen to stay in Valcarlos, post your opinion of the Casa Rural on this site and the toprural.com site, too! I'll probably be staying there in April...