why did Spain start to have kings and queens?

Alfonso XIII's claim descended (due to his two eldest sons' renunciations) to his third son, Juan of Bourbon, Count of Barcelona, who was passed over in favour of his eldest son, whose title is King of Spain. The Count of Barcelona renounced his claims in favour of his son in 1977, two years after Franco's death and Juan Carlos's accession, but before that their was a spanish civil war on nationalism, and Franco seeing that Monarchy would unite everyone for Spain did so.

Just stupid, I guess. Although after the death of Franco, going back to having kings and queens again probably seemed like a pretty good idea.

It was all the rage back in the early Middle Ages. There were few if any countries that weren't monarchies.