Then what are schools going to teach? That kids should just spell a word however they feel like as long as someone can understand it? And then there's what we see on the Internet nowadays where speakers of those small/regional/non-national languages can't decide on one way to spell their language because there's a ton of dialects and each person obviously wants to speak and write in their own dialect. Should each dialect get their own country too in order to prevent more prestigious forms of the language from dominating them?
Are you not confusing dialect and language? What I listed concerns languages. While many of those listed have largely faded out, and/or have adopted more and more characteristics of the dominant language of the country, back around 1800 or so, these were certainly languages. Not just different ways of spelling words and things like that. There is a tendency among some people to dismiss local languages as mere dialects. That tendency is a legacy of the same development that led to the standardisation of 'national' languages in the 19th century. Those advocating for standardisation often deliberately misrepresented local language as boorish, backwards dialects of little value or distinction.
What has been suggested in this thread, by myself and others, is the possibility that instead of dominant languages becoming the standard, a situation where the many local languages each undergo their own standardisations would be preferable. The idea that it's impossible for them to standardise is ludicrous. Dutch could standardise, couldn't it? If around 1800, Frisia had been split off from the Netherlands, I assure you Frisian would soon have achieved a standardised form. It is the lack of independence and the decline of the language (specifically, the ensuing lack of institutional support) that caused the failure to standardise many local languages in OTL.
Supposing that in 1800, an ASB flaps its majestic wings over Europe, and all the etnho-cultural-linguistic groups in Europe magically get their own sovereign states and the corresponding recognition by their peers, I assure you that their languages would soon achieve standardisation. Depending on the borders drawn, the shape of that standardisation may of course vary. For instance, Frisian has three distinct forms. If these all get their own country, they'll almost certainly each standardise separately. If they become one united Frisia, I'll bet you'll see a single standardised Frisian language emerge before long.
Needless to say, while independence fosters the formation of a national identity, and such an identity fosters the cultivation of one's own language, it is still a fact that closely related languages often borrow from each other, and grow to be more alike. The increasing interconnectedness of our world would see to that in spite of our designs, whatever they might be. So for instance, I consider the lasting existence of Bressan, Dauphinois, Forèzien, Jurassien, Lyonnais and Savoyard as fully distinct languages very unlikely. Even if they were to be split off from the political power of Paris entirely, it's still to be expected that they would grow closer politically and linguistically, eventually becoming the colourful dialects of an emerging Franco-Provençal / Arpitan language, within a country covering that same area.
Taking all that into account, a vaguely 'realistic' projection of my own decentralist ideal ('realistic' as in: these countries could all survive independently) could give you a modern-day Europe looking like the list below. (ATL countries in italics.)
Finland
Sapmi
Karelia
Greater Ingria (including the Vepsian and Votic areas)
Estonia
Livonia
Latvia
Lithuania
Denmark
Norway
Sweden
Iceland
The Kingdom of the Isles (Faroe Islands, Orkney islands, Hebrides, Islan of Man - a multilingual confederation)
The Celtic League (a multilingual confederation of Ireland, Scotland, Wales, Cornwall and Brittany)
Ulster (consisting only of the Protestant majority areas; minor population swaps may be advised)
England
Frisia
The Netherlands (a confederation of several Low Franconian provinces)
Saxony (a Low Saxon confederation, consisting of the four traditional Saxon
marks: Engria, Nordalbingia, Westphalia and Eastphalia)
Lower Germany (consisting of Brandenburg, Mecklenburg, Pomerania and Lower Prussia)
Luxemburg
Middle Franconia (Rhine Franconiam and Central Franconian areas, minus Luxemburg)
Hesse
Thuringia
Upper Saxony
German Silesia
Prussia
Upper Franconia
Swabia
Alemannia
Liechtenstein
Bavaria
Tyrol
Austria
France
Arpitania
Occitania
Monaco
Andorra
Catalonia (including Valencia)
Aragon
Spain / Castille
Asturias
Leon
Extremadura
Portugal
Galicia
Euskal Herria / Basque Country
Padania
San Marino
Tuscany
The Restored Papal States
Naples
Corsica
Sardinia
Sicily
Malta
Greece (extended east to the Bosporus)
Cyprus (fully Greek)
Czechia
Slovakia
Poland
Slavic Silesia
Kashubia
Slovincia
Sorbia
Russia
Belarus
Ukraine
Crimea
Ruthenia (Rusyn state in far western Ukraine, east of Slovakia)
Slovenia
Serbia
Croatia
Bosnia
Montenegro
Bulgaria
Macedonia
Hungaria
Székely
Banat
Wallachia
Moldavia
Albania
As one can see, this would mean that Belgium, Germany, Italy, Romania and Moldova cease to exist in their current form. Ireland and Scotland are united in the Celtic League (an idea I have always liked, and it gives Cornwal and Man a place to exist). Yet even if Europe loses seven countries that exist in OTL, it contrarily gains no fewer than 45 that don't exist in modern-day OTL. A net gain of 38. Each of these countries could plausible have its own language, and some could be multilingual.
Europe would be a far more diverse place, without becoming some totally unmanageable mess.