Alicia's apartment is absolutely PERFECTLY situated. It has a great view of the Plaza de Callao and the new windows seal away the noise so you'll be comfortable whilst making the most of your trip. Many of the sights to see are within walking distance, and there's a metro station just outside in the Plaza for longer trips. Gran Vía and other shopping is also really closeby, and the El Corte Inglés has a nice basement supermarket for wine and other goodies to stock up.
One note for those with wheelchair guests - please get in touch with the host beforehand depending on your needs. My father is able to stand/walk a little so, although the elevator was very tiny, we could fit the wheelchair closed (without the foot rests) with him standing alongside it. However, the elevator would likely not fit most open wheelchairs. Otherwise, the surrounding area is great for wheelchairs as the sidewalks are wonderful!