While the main driver for Portuguese Overseas Expansion was trade with the Indies, keep in mind that settlement colonies were far less of a priority, but that does not mean that they were not pursued.
Letters to the various Kings of Portugal show that early on in the 15th century that the Portuguese court was aware of how small and poor the kingdom was, and that it's lands should be expanded. One of the first ways to achieve this was of course through dynastic marriages with Castile, and it was assumed that all of Spain would be united at some point in time.
Expansion into North Africa was important as it was seen as a continuity of the reconquest and as a source of grain for Portugal. Between 1415 and 1578, the Portuguese crown spent a large amount of its resources on building fortresses and sending expeditions to North Africa in an attempt to conquer present-day Morocco. Additionally, the crown sent many nobles to North Africa along with thousands of settlers in an attempt to replicate a feudal system there.
Finally, there was the colonisation of Madeira and the Azores with feudal proprietor-captains. These uninhabited islands once again were seen as potential sources of grain. Though grain was not a cash crop, the import of grain and flour drained much of the Portuguese treasury during its golden age. Within a century of colonisation the Azores and Madeira became overpopulated and would become a springboard for many of Portugal's attempts at settler colonies around the world.
Brazil had been all but neglected during its first three decades, as it had been a relatively poor land, with natives considered poor and with no traces of gold or silver. However, several of the king's advisers had called for extending the captaincies that had been successful in the Azores and Madeira to Brazil in the 1520s, stating that the king could settle thousands of settlers in this land and extend his domains. As a result, in 1531 the first 400 settlers arrived in São Vicente. This settlement grew as the century progressed, and by 1580 it was a major producer of sugar. Martim de Afonso recommended bringing over 1,000 couples to settle in the province, showing that settler colonialism did enter into the public consciousness.
The captaincies in Brazil were largely a failure, but as poor of a land as Brazil was initially, some 93,000 Portuguese settled in the colony between 1531 and 1580. Compare this with 138,000 Spaniards between 1492 and 1580 in their far richer colonies. Often the Portuguese Crown attempted to colonise areas with far less success. In 1521-1522 the King of Portugal granted an Azorean Captain the rights to settle in present-day Sable Island with settlers and livestock. The settlement failed without a trace, but the cattle remained.
In Brazil too there were failures. Beginning in 1618, the colonisation of remote Pará and Maranhão in Northern Brazil was seen as a priority to keep out the French, despite the area showing little economic promise. As a result, between 1618 and 1671 some 4,000 settlers from the Azores were brought to the region. By 1674, fewer than 600 settlers lived in the region, with their numbers having been reduced due to prevalence of diseases in the region. However, the Portuguese continued to send settlers to Brazil for the next century and only by the late 18th century was it profitable due to the cultivation of cotton.
This should lead us to analyse some of the differences in outlook between the Kings of Portugal and Kings of Spain. Firstly, because of Portugal being a largely small and resource-poor kingdom, settlement colonisation overseas was seen as necessary to increase the size of the king's domains. This was omnipresent in the public discourse as early as the 15th century. From here we get the concept that would permeate Portuguese colonialism until 1974, wherein the colonies were merely extensions of Portugal on other continents. This was largely the case of the Atlantic Islands and Brazil, from early on. In many ways Portugal's rulers tried to compensate for Portugal's own smallness by expanding overseas.
The result of this mindset however, would be a highly-centralised colonial administration, where the world revolved around Lisbon. Whereas the Spanish colonies under the Hapsburgs were far more flexible in their administration and even developed elaborate viceregal courts and in many ways became in some ways Kingdoms in their own right, this was not the case of Brazil. Prominent Brazilians who were distinguished usually made their way to Lisbon and were given important positions in the administration of the kingdom. Even culturally, where Spanish baroque art and architecture in Mexico and Peru often incorporated indigenous motifs, in contrast Brazil's was completely indistinguishable from that found in Metropolitan Portugal.
Unlike Spain, Portugal simply did not have the manpower to rule a large empire or to distinguish between creoles and peninsulares like the Spaniards. The Marques de Pombal in particular was a proponent of centralisation of the army and navy and having everyone adopt a Portuguese identity.
The result of this was that to some extent, many Brazilians identified themselves as "Portuguese" up until 1822, with even the Republicans of the Pernambucan Revolt of 1817 calling for the unity of the Portuguese from America and Europe to overthrow the monarchy. Even José Bonifácio de Andrada in 1822 still referred to himself and his compatriots from Brazil as "Portuguese".