Unfortunately hammering banging along with the regular blasting of car horns, particularly after 11 at night is all part and parcel of the being in Madrid. A local once commented to me about how sick everyone is of the constant renovations and construction going on. I've been here 4 months know and I have to agree it gets tiring after a while.

As to A/C when booking a room its best to ask, A/C is the exception rather than the rule, this is pretty much true anywhere in Europe.