Depends. Playing him long-term is not in Madrid's interest. Doesn't have pace to match top midfielders, stamina questionable over length of season despite his recent stretches. Basically he's still very good in short bursts which helps the team as barely anyone in the world has the kind of influence he does. But you'd not want him there in midfield vs peak City as was shown a year ago vs their mediocre iteration, even in better form.
Contractually he's doing exactly what makes sense - stay in a side that appreciates you, but do not burden them when you're 36-37 at the end of the next deal.
Ramos is doing the opposite and has to be for a reason - either ego and thinking he deserves anything to be granted even if unreasonable at a glance because he's given so much over almost 20 years, or a more tangible problem. Sergio and Rene have a history of drawing out negotiations - remember the United saga some years back? Can't claim if it's just or not. But it's clear they are combative, whether from their interviews, that documentary or otherwise. If rumors of the issues with his estate in Los Berrocales are true then it's no wonder things are where they are -
https://cincodias.elpais.com/cincodias/2020/06/03/companias/1591204006_700741.html
I do hope he renews, but I think it's too far gone. And he deserves to get paid whatever he wants. Real can't afford him it looks like so if PSG can, all the best.