Why a hostel? They can be pretty awesome as a way to meet people if you are traveling alone, but for a couple of bucks more you can normally get a pretty reasonable "local" type of hotel room...might not have hot water but at least you aren't a grownup sleeping in a bunk bed. I tried it out once...then realized the rooms next door were like 5 bucks more and came with breakfast.
edit: thats not for spain, just europe in general. have a blast:) Beautiful country/people that I would like to explore, its on my short list of places I haven't seen yet that I need to. got to chat up some chef folks that worked in spain, dear lord it sounds like the best country to hang out and just feast and be festive in the world.