Example Statement: He acted as interpreter between the Spanish locals and the tourists.
Should the preposition following "interpreter" be
"between" or "for" or something else? or should the entire sentence be reworded differently altogether?
"For" is the preposition you're looking for. One can also translate as an action, in which case the word does not take a preposition. For example, consider these two sentences:
She worked as a translator for the United Nations. She translated Korean into English.
In the first sentence, "translator" takes the preposition "for", but in the second sentence, "translated" takes an object ("Korean into English) but does not take a preposition.
Here are a couple ways to cast your example sentence:
She worked as a Spanish translator for the tourists.
She translated the local's Spanish into English for the tourists.