Hi Jo-Anne,
I'm not an expert at all, but last May my daughter and I stayed at Hostel Antares. It was a great location, very central. Clean, comfortable beds, shared bath - but we did not have to share it. The bath room was huge.
We took a bus from Madrid to Granada and from there to a central area of town. So that I do not copy the information incorrectly, under SEARCH (Granada), look for a thread started by me May 7, 2010. MM and some others give bus information to arrive at the Granada Cathedral. That may be of a help.