I can see Mexico switching sides at the last moment, maybe "retake" their lands. After all the Confederate states like Sonora have a better infastructure, then most of Mexico. Atleast by how people refer to Mexico in the books.
Very possible. Didn't Italy switch sides in WWI? It would definetly be in their self-interest.
Cuba may become independent, that little Fidel boy giving a hand.
The CSA has no way to stop it. So I'd say this is inevitable. It will not be occupied the USA, just independent.
I however do not see the CSA wiped off the map. It would take too much manpower to hold the region down. Maybe a small and well equipped Black state, I am thinking Kentucky here, for it is close to the trouble areas in the East, and has a population that has a generation under Yankee rule.
The US occupied the South after the OTL American Civil War. Assuming an independent Cuba, that means the US will have to occupy Kentucky, Utah, Sonora, and Chihuahua as well, however the latter three wouldn't be very populated. Especially Utah which, with frequent conflict and the inevitable exile of the Mormons, will have a much smaller population than the OTL half-million in 1940. The remaining Blacks could also be used in the occupation.
In addition, we occuppied Japan, South Korea, and West Germany after WWII. All three represented quite a bit of population and land area to be occupied.
In each case, there was a large scale occupation by USA forces. Sure, the US has a lower population in this ATL, but the point is the US has successfully done very large scale occupations before. I don't see why it won't be possible now, particularly with the the shortage of fighting age males the CSA will inevitably have by the time this is done.
So my conclusion, bye bye CSA. The book will be called "In the Death" afterall. I don't think Turtledove is talking about good ol' Mexico here. That, and the CSA has been a constant threat and even launched a surprise attack after the USA allowed plebicites for states to join the CSA. After WWII, the USA AND USSR wanted to reduce Germany to an agrarian nation so it would never be a threat again. I think the attitude will be the same here, but will be accomplished by abolishing the CSA.