I have stayed in a few hotels in Madrid, Barcelona and a few other places.
In my own personal opinion the amount of stars a hotel has does not seem to reflect how good it is.
I have heard that they are even going to open a seven star hotel in Almuñecar.

Any comments.

The star system is only a rough indication of the quality of a hotel.

I have heard that to get a 5 star rating the hotel must have a lift but there are some excellent hotels which have only one floor
with no lift and can never get above 3 stars.

Here are some links which will show places to stay in Granada according to how many stars they have.

Five star hotels in Granada
Four star hotels in Granada
Three star hotels in Granada
Two star hotels in Granada
Hostals in Granada
Apartments in Granada