Let's say that instead of Castile and Aragon forming "Spain" in the 15th century, it's a union of Castile and Portugal that forms "Spain" instead. How would history change as a result?
For starters, without Castile tied to Aragon and its Italian orientation, the Spanish monarchy is tied up less in the volatile politics of Italy in the Renaissance. In addition, with Portugal now tied to its biggest possible rival on the colonial stage, Castile-Portugal might as well have a monopoly on exploration of the New World for quite a while, in addition to its hold on the circum-African trade routes.
Another interesting wrinkle is seeing how the Anglo-Portuguese alliance may be affected by Portugal's union with the larger, more tenable Castile.
The only option I see is a definitive Portuguese victory in the battle of Toro, putting in the Castillian throne Joanna la Beltraneja. Probably the Castillian nobles allied to Portugal would gain influence and power in the Castillian realm, they could bring the Libro de las Leyes/Siete Partidas has the way to rule Castille curtailing any attempt to centralize power there. So, in my opinion, Castille would be in the hands of powerfull nobles, and this could be exploited by the future monarchs to keep Portugal has the powerfull partner in this relationship, pitting noble interests against each other.
Regarding colonial affairs, at least the Americas, being discovered by Columbus or Cabral, trade would be open and without main ports, the Casa de Contratación would not exist, so probably to trade American goods one would make a form tribute to the King has it was in Portugal. Indias would be under the Casa da India so probably centralized in Lisbon and under the Cartaz System.
No wars against other Europeans, probably France if Aragon seeks any form of union to protect itself, and open trade, probably even with Dutch and English like OTL Portugal, and a mare clausum in India would be my bet. The dutch would be more manufacture centered regarding its economy focus, and the trade companies could not join to form VOC, being better to keep good relations with this Spain that would be more colonial ambitious, probably having a stronger fleet, than risk embargo.
The English are a bit of a wild card, diplomatic envoys os D. Sebastião complained in London of piracy activities on Guinea Coast already on 1570s so England could be more agressive than OTL, and become the problem the Dutch were to the Portuguese.
The biggest capital sink of this union would be probably the North African forts and incursions there, the Portuguese started to abandon then around 1550s, only controlling Mazagan, Ceuta and Tangier later.
