I'd choose Málaga City. Marbella is too fancy-schmancy for me, the prices will be much higher, the beaches more exclusive, and the hotels more expensive. If you're into all that, then choose Marbella. If you want better prices, decent beaches, and a more Spanish-feel, choose Málaga City. In Marbella you'll have a higher percentage of rich foreigners. Plus, there are quite a few historical places to visit in Málaga City.

Saludos, MadridMan