It all depends where in Spain they are going. On the costas it's relatively cheap, but Ibiza and Mallorca can be very expensive to get into the big discos. You can eat a full 3 course menu del dia for about 7 - 10 euros -all much cheaper in San Antonio.
Can't help you there I'm afraid, althought I think it's a lot cheaper on the mainland. Anyway, defo eat the menu del dia, as it's good healthy food and cheap. Enjoy!
I would say take �200 each for spending money. Take �100 in Euros and �100 in travellers cheques. If you want you can take �150 in travellers cheques because you can just cash them back when you get back to England. Spain is quite cheap really. I always take too much money and end up cashing some money back in after my holidays.