Last December I traveled with my parents to Lisbon for 3 days, we then took the night train to Madrid, where we stayed one night, seeing the Prado and the Palacio Real, and then continued on to Barcelona, where we met up with my sister's family for 4 days. It was a great trip.
Three days was plenty of time to see most of the sites of Lisbon proper. We especially enjoyed Dinner and a Fado Show at Parreirinha de Alfama (
http://www.parreirinhadealfama.com/en/?home). The various Miradouros (lookout points) throughout the city of 7 hills are spectacular. There are also a bunch of great sea food restaurants along the Rua das Portas de Santo Antao. Unfortunately, we did not have time for any day trips, as I would have liked to see the Palaces at Sintra.
We stayed at the Hotel Convento do Salvador, which though somewhat no-frills, is clean and in an excellent location. I would recommend it. You can probably find a cheaper AirBnB, but I think it was worth having a professional English-speaking staff, who could provide directions and recommendations on things to see and local restaurants.
The night train to Madrid was an interesting experience. We booked a sleeper car. It wasn't exactly cheap, but considering we got both transportation and lodgings for the night, it wasn't too outrageous either. It was really nice to arrive in Madrid fully rested and not lose much time to traveling. However, while a single night on the train was totally fine, I'm not sure I would want to do it twice in the same week. So, that may limit your options for making a round trip from Madrid to Lisbon. Further, for a couple such as yourself, you probably wouldn't want to rent a full car, which requires buying 4 tickets. You can buy single tickets and book a birth in a "shared" car, but those are segregated by gender, so you and your SO may have to be separated.
We didn't have much time in Madrid, so we only saw the Prado Museum and the Palacio Real, both of which are excellent and highly recommended. I'm sure there's a lot more to see. We stayed at the Hotel Mediodia, which is within walking distance of the Prado and across the street from the main train station. It was nicer than I expected given the quite reasonable price and prime location.
The train to Barcelona is fast, covering the distance in about 2 hours. Tickets are quite reasonable if purchased well in advance, but prices climb rapidly (2-4x) as the departure date draws near. Barcelona was the highlight of our trip. Lots to see and do. If you do go, make sure to make reservations in advance for a tour of la Iglesia de la Sagrada Familia. I would also recommend studying "Las Meninas" in the Prado and then visiting the Picasso in Barcelona to see Picasso's take on this famous painting.