Alvaro de Bazan does not die, and instead leads a strengthened Spanish Armada. He anchors his Armada in the Spanish Netherlands, as OTL, but unlike OTL, the English do not attack with fire ships, as such, he is able to rendez-vous with reinforcements from the Duchy of Parma and the Armada is launched to beneficial weather.
After a dramatic battle, the English are defeated and Charles Howard and Francis Drake meet a pair of watery graves. The Spanish make land on the English coast and unload their soldiers, who head off to march upon London, the Armada itself then disembarks, with the more damaged ships heading back to friendly ports for repairs and, ultimately, military reinforcements for the invasion, and while the battleworthy ships remain off the English coasts to harrass the English fleets and sink their ships.
As England suffers loss after loss, the Catholic nations of Europe throw their lot in with Spain. By 1559, London has fallen, Queen Elizabeth is in exile in Northern Ireland along with many other protestant English. Capitulation has started to begin, Catholicism is starting to come out of the woodwork and various communities begin to surrender to the Spanish. Meanwhile, Scotland sees which ways the winds are blowing and purges its courts of protestants and throws its lot in with Spain. The Scottish begin their own invasion of Northern England, dismantling what remained off the English state up there. Again, more protestants flee to Northern Ireland. In a coup de grace, Phillip names himself King of England and establishes a Catholic cabal to run the privy council.
By 1560, the United Provinces have been crushed and the Netherlands are under Spanish control again. Meanwhile, in Britain, an inquisition has begun, with the aim of whiping out any religious or political dissent. Content that their king's control of England has been secured, the Spanish armies head home, taking what remains of the English Navy with them.
Fast forward sixty years: Spain is now an empire in decline, it grew too fast on the back of New World gold and now faces financial problems. Elsewhere in Europe, Catholicism is dominant, although it is less popular in some places than others, low level rebellion coexists with religious heresy throughout the Germanies and the British Isles. England and Scotland, the former still in a personal union with Spain, and the latter closely allied with both, and increasingly interconnected with the former, constitute an aggressive Catholic power. The Kingdom of Ireland, a protestant nation governed by the descendents of Elizabeth I, (who had given up on the whole Virgin Queen thing at some point), is strongly opposed to England and Scotland, and a tense situation exists between them - Ireland is able to stand its ground because it controls the Irish Sea, (the fleeing Protestants took some boats with them, while England had its fleets stolen/sunk and its shipyards burnt, putting them far behind while Ireland placed its emphasis on building as formidable a navy as possible). But this won't last forever, as sooner or later England will regain its natural naval superiority.
England fought a number of unsuccessful wars in the Irish Sea in the 1590s-1610s while the Irish Tudors extended their influence out from Ulster and over the whole island, but the turning point came in 1622, when England successfully invaded Ireland. The Irish attempted a counterinvasion, managing to successfully land in Northern Wales before being pushed back. The Irish royal family were whiped out, along with the flimsy Protestant ruling class they had imported. The Southern Catholics sided with the English and by the end of the year, the Ireland was back under complete Catholic control for the first time in generations. In 1626, the Kingdoms of Ireland and England were united into the Kingdom of Anglohibernia.
Then, in 1629, the deck of cards collapsed, as mainland England began to erupt into rebellion. The rebellion was anti-Catholic and anti-Monarchist is flavour, with factions ranging from the liberal and moderate to the downright nutty, (various heretical forms of Christianity arose and fell in this period). Within the next few years, rebellion spread into Scotland, which had just as many oppressed religious/political minorities as its southern neighbour. In 1633, a group of extremists lit a number of fires in London, causing irrepairable damage. Not many people died in the actual fires, but as soon as rumours began to circulate that the fires were set by a) radical heretics, or b) by the state with the intent of blaming radical heretics, riots began. These riots went on for weeks and killed thousands. Eventually the elite decided to evacuate London, but they found that there was not much more order outside the city. It soon became evident that an unrecognised government was operating out of York, co-ordinating the largest coalition of revolutionary forces.
By 1635, the York Government was playing clean-up, uniting the last patches of the Great Britain that had not yet accepted its authority. The King and his cohorts had fled to Ireland, to the state that was not called 'the Kingdom of the British Isles', ever since Anglohibernia had claimed the Scottish throne after its last incumbent was executed by the Edinburgh mob, although, they only held one small part of the British Isles: Ireland.
In 1642, there was a coup in York. The moderate parliamentarians were displaced and a dictatorship was established under a young man named Arthere Crambells. The dictatorship was established with the goal of creating a state where religious freedom would be absolute, but in effect the dictatorship busied itself with eliminating those faiths that were viewed to be institutionally biased against smaller faiths, the faiths that in the past had punished people for heresy by exercising religious freedom - this gave Crambells and co. the excuse to brutally repress Catholicism, but also many mainstream Protestant sects were also repressed. His dictatorship became a protector of the fringest of faiths, so long as those faiths accepting the authority of his governance. Foreign and domestic detractors described Britain as a 'hive of heresy'.
In 1647, the Republic of Britain invaded the Kingdom of the British Isles, and a long and brutal war began. As opposed to the war of fifty-odd years ago, this was a war that the Irish didn't actually want to lose, and they fought ferociously to assure that they did not.
In 1655, Republican Britain decided that the war in Ireland was politically damaging and decided that it might have more success with a war in the Netherlands. Catholicism there was still enforced mostly as the end of a sabre or with a shot or two of gunpowder, and it was thought that many there would welcome British intervention. The British Navy was by now pretty formable, having completely recovered from the rape of the Spanish invasion. And so off the British sailed.
By this time, Britain was having to run a pretty intensive military recruitment program. Able-bodied men were plucked from their village, given just enough training, filled with a headful of propaganda and sent off.
In 1657, Britain withdrew its troops from Ireland to assist in the Netherlands, where neighbouring Catholic powers had begun fighting against them. Of course, by this time, the war was spreading further into the Germanies.
In 1660, the First Alliance, (Bavaria, Austria and Denmark-Norway), had beaten Britain to a stalemate. A peace was signed, putting a pro-British government in charge of a smaller Netherlands, and leaving a buffer-zone between it and Austria and Bavaria consisting of small states unaffiliated with the HRE.
In 1662, Crambells' Britain launches an invasion of Denmark, the weakest of the states of the First Alliance. In this campaign, Britain receives a number of allies, specifically from the few protestant states in Northern Europe. The war again spreads into the Germanies as alliances get called up. In 1668, Crambells dies and there is a brief moment of uncertainty in the British Army. Britain's enemies, much more of them now than in the First War, many more from Southern Europe, take advantage of this and intensify their actions. Crambells' son, Catharoy Crambells, assumes control of Britain and voices his intent to continue his father's crusade against religious absolutism. However, the war was already turning against Britain, and by 1671 peace negotiations have begun.
Denmark and Norway are divorced, with both of them coming under separate republican leadership, the former is decried to be neutral, while the latter is to be a British puppet. The Netherlands have expanded southward and westward, but have lost a strip of land to France, who joined in the War in the last few years.
Although the peace was pretty good for British interests, Catharoy Crambells feels like he has let his father and his nation down by accepting a peace so soon into his reign. As such he begins a daring plan, an invasion of England's traditional enemy, the hated inquisitor, Spain. Of course, the Spain of the 1670s is very different to the one of the 1550s, and very much weaker.
The British launch their invasion of Spain in 1678, smashing through their outdated defences and quickly gaining control of much of the nation's west. Spain's allies send military specialists to help the Spanish resist the invasion, but to little avail. New Spain declares independence and debates whether to assist their former metropole, the vote is close, but the answer is no.
The Catholic powers of the Italies become worried about the thought of the British achieving access to the Mediterranean, and so, with the Catholic powers of the Germanies, they decide to attack the British puppets in Northern Europe. The War of the Third Alliance begins, and the Spanish campaign goes into the back of the British mind as a continent-wide war begins in Central Europe. In the midst of this war the Holy Roman Empire collapses and the map of Europe is redrawn forever.
And so on and so on, this pattern repeats itself on and off for the next two hundred years. Britain sends its boys off to fight and die in wars for control of Europe, (which vary in success), while France mostly stays out of the picture, joining in oppurtunistically whenever they think they can gain something from the peace, (so, a bit contrary to the actual challenge, this France will probably stretch a bit further west).
Eventually, it is France, the neutral oppurtunist developes an industrial revolution. Britain, for much the same reasons as OTL France, distrusts urbanisation and industrialisation, and prefers to prop up an idealised view of country life, (that was only possible due to constant male depopulation). Ireland, meanwhile, has escaped Britain's clutches in TTL, protestantism is pretty much non-existant thanks to a strong Catholic state being in place to discourage it. The ideology that spurred the potato famine is absent from TTL, and so the pressures to emmigrate to the (largely Spanish-speaking) New World are gone. Ireland follows France's lead into industrialisation.
TTL's Germany never includes Austria or Prussia. Instead, it is united by Bavaria, and is run as a reactionary Catholic traditionalist state. Industrialisation is shunned in favour of agriculture.