Mallorca is fine. If you're driving in the old towns, you probably don't want anything much bigger than a Seat Ibiza to keep parking easy. The driving is pretty relaxed for Southern Europe - you see the odd bit of idiocy on the main motorway round Palma, although half of that is tourists in rental cars...
Don't know where you're picking the car up from, but be aware that the queues for non fast-track service at PMI can be horrendous in anything approaching peak season.
If you're visiting Palma or any of the popular towns, plan your parking - get an app like Parkopedia. It's not always that obvious or simple to find.
If you're driving the west coast road along the Sierra Tramuntana (highly recommended, by the way), do expect it to be slow going. You won't be the only one, and you'll be accompanied by a lot of unpowered 2-wheelers!
Insurance generally won't include glass and tyres, so expect this to be pushed (particularly if you're at one of the local hire companies) and a deposit/hold taken if you decline. This is normal procedure - the majors do it too, but tend to be less shouty about it.