When I cream butter and sugar together I mix the two vigorously with a wooden spoon (or in a stand mixture if available and I'm feeling lazy) until and nice smooth mixture with no lumps is formed. For this it works best if the butter starts and room temperature and is a bit soft.

The thing that results in small covered crumbs is what I call cutting in. For this the butter should be cold so it will stay in lumps. I do this for sconces and pie crust to get that light and fluffy texture.