I wonder how modern Spain and Portugal look ITTL? I suspect that Spain would likely get way more Marshall Plan aid, and probably be significantly better off than today as a result of no 30 years of Franco.
Spain and Portugal would are indeed in better condition without their own dictatorships ending much earlier. And Portugal might allow its colonies go peacefully so not years lasting bloody and pointless colonial war. So Angola too might become much more peaceful and prosperous nation instead being war-torned and good parts of country beying covered by mines.
You also seem to be hinting that Spain isn't really viewed as a full Axis member by the Allies (or at least the US), so I can only wonder how that would play into their modern perception. Would Spain also be a Republic?
Spain probably will be republic. Americans weren't famously ever intrested about restoration of monarchies unless Churchill manage to push his own will forward.
Would they be territorially intact?
European part of Spain would be pretty much intact altough Portugal might take Olivenza. But I hope that we avoid that Galicia to Portugal trope. It doesn't make sense with post-1900 POD and IMO it just looks on map pretty bad.
Spain almost certainly will lost all of its territories outside of Europe. Spanish Sahara and Northern Moroccan holdings go to Morocco, Canary Islands probably to Britain or Portugal. But the islands going to Morocco not make any sense. Morocco never claim these islands and it doesn't want something like one million angry Spanish Catholics. Spanish Guinea (modern day Equatorial Guinea) would go to France and perhaps it becomes part of Gabon.
Would they have stronger or weaker regional idenitites?
Spanish regions probably have still strong identitet but without Franco's 30 years lasted opressing of Basque and Catalan nationalism there wouldn't be ETA and Catalan independence movement would be much weaker.
I'm also interested to see that Salazar ruled for only ten years - what happens next? Does Portugal remain the poorest country in Western Europe? Fascinating stuff, keep it up!
I don't see any reason why Portugal would remain one of poorest nations outside of Eastern European and Balkans nations. Salazar's anti-industrial and anti-modernisation policy would die with him and after the war Portugal would get Marshall aid and the country would become democratic and more prosperous.
Once the regime is defeated and the trials begin, who do you think is gonna be executed ? Besides the obvious Franco and Suñer, I thought about many important generals getting the noose (Muñoz, Yagüe, Queipo de Llano...)
Franco and Suñer would are definitely hanged assuming that they are captured alive. I don't think that generals are hanged unless they have been part of Franco's inner circle and/or commited war crimes and crimes against humanity.