The POD is both before the Iberian Union and the Anglo-Scottish Union. Having the former survive and the latter dissolve would definitely help, especially if it resulted in the English, Scottish, Welsh and Irish weakening each other through infighting. With the British out of the picture, Iberia has pretty much a free hand - minus France.
The POD is also before the English bought Manhattan, before the Spanish Armada failed, before the British "ruled the waves," etc. Essentially, if the United Kingdom can be prevented from forming and the British Isles turns into a war zone with each nation having to invest in their armies instead of one unified navy, United Iberia (which controls the Low Countries as well) could dominate the Atlantic and who would be able to dislodge them? Only the French.
In terms of language, 470 years is a long time for Portuguese and Spanish to merge, develop a "Castellano Real" used by royalty and the upper classes, or eventually become considered more or less the same as English and American are seen nowadays. Remember that Spaniards don't call their language Spanish, they literally call it Castellano (the language of Castille) and the Spanish they speak in the New World is Latin. There are already 'two' Spanish languages IOTL, so I don't see what it would be ASB for Portuguese not to be considered a third Spanish language.
Regards,
Northstar