Belgium being in the control of a possibly unfriendly Great Power was a non-starter for the British. They could not afford it, and would not have permitted it for any length of time.
Germany only invaded Belgium to get to France, they had no interest in conquering it until Britain joined the war, after which they wanted it as a staging post against Britain in a future conflict (hence the promise in the draft ultimatum of French territory if they let German troops through).
The German government would have agreed to almost any condition Britain set on neutrality, and were willing to promise no annexations of French core or Belgian territory (a promise that just angered Asquith and Grey more if anything because it basically admitted designs on French colonies).
Whether they would have gone so far as to stay out of Belgium for a promise of neutrality (as Prince Lichnowsky hinted to Grey) is questionable looking at the Schlieffen Plan, but Grey didn't even try to negotiate such a deal. For reference Gladstone had done this in 1870 and been successful.
The trading relationship between Britain and Germany was far more complimentary than competitive pre-war and would likely have stayed this way. Germany was mainly interested in exploiting the Eastern lands of Russia, not a trade war with Britain.
Britain was also not really in terminal decline compared to Germany. In some specific industries like steel Germany was out-competing Britain. But the century of British dominance meant it had so many overseas investments by 1914, they profited as much as Germany or America did from their expanding economies.
What really set Britain in decline was WW1, having to basically fund both of its allies from 1915 whilst also having to build their own army capable of routing the Germans in 1918. As such they had to liquidate a century of carefully built up investments. Wilhelm was unpredictable and Germany obviously expansionist having started the conflict, but the nation would have been tied up trying to hold its new Eastern colonies, as well as fearing a war of revenge from Russia at the first chance. The naval arms race was over by 1912, had Germany chosen to restart it with the plunder of France and Russia, Britain would have won it again.
Ultimately staying out of the conflict guaranteed a powerful Britain, entering it, as seen did not (I also think it is underestimated just how close we came to losing the war several times, without American aid from 1917 we'd have had to stop fighting).