I've only heard negative things about Ryanair - but negative voices tend to be louder than positive ones. I've not flown them myself, but people close to me have and it wasn't a pleasant experience at the check-in counter - disorganization - but that was the only complaint. Oh, and it seems certain airlines have priority over departure, as well. Not sure how that all works, but I wouldn't be surprised that Ryanair would be towards the end. Another person I know had one of those experiences where they sat on the tarmac for 3 hours before being allowed to take off. Some mechanical thing. Anyway, as long as there's no pilots' or baggage-handlers' strike taking place while you're traveling, I would think you'd make your connection in Madrid.
As for overnight buses in Spain, ALSA is probably the best, best known, and farthest-reaching bus line. I've never used one overnight, no, but their daytime buses are great and very comfortable. I did venture ONCE to use the broom-closet sized toilet at the bottom of the stairs at the exit door (mid-coach) and nearly got my "bell rung" several times while standing there due to the bumps in the road. Hopefully yours would be an "Express" bus. The overnight buses usually are, having only one stop at mid-point (or every 4 hours, whichever comes first). The Express buses are only a little more expensive, usually, and worth the savings in time.
Saludos, MadridMan
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