Actually, I believe that the taking of Granada is also counted as the creation of Spanish Kingdom with Isabella and Fernando but I am not quite sure. It is an important day anyways.
If I remember correctly then the Arabs in Spain were as advanced as the others but both surpassed the other in some areas.
Not just Granada, the Christians took the ports and other territories. During those periods, maintaining an army was quite difficult: you had to get supplies, warm summers (at Granada I suppose over 50 degrees Celsius).
In the first years of the Arab conquest the Arabs controlled the whole Kingdom of West Goths. They lost it piece by piece. Firstly a duke of the kingdom and relative to the king declared him a king of Asturias, his territory after his kings' total defeat and fall in battle. So did other states appear: Pamplona, Navarra, Portugal, Leon, Castile (which evolved into modern Spain).