As has been said, it's not neccessary to have the Caliphate ruling the entire Peninsula. Up to the year 1000, the Christian kingdoms were just a boxer punch to hit and loot when the Caliph was bored. After Almanzor's death (who threw the Caliphate in bankruptcy due to this, as Dthntze said) it became the other way.
Crusades aren't a problem. There was never a proper crusade in Spain, entirely formed by knights from England, France or Gemany. The Pope just endorsed the campaigns already going there and gave his bless to anyone willing to fight there. But nobody really messed with a strong Iberian Caliphate. What would they win doing that? Even Charlemagne in the late 8th century, when he failed to take Saragossa he simply left it unmolested and made good relations with the Muslims. The Cordoban Caliphate is strong, but not expansionistic (in the north) nor a real threat to the Western Christendom anymore. There is no real reason to attack it from outside.
This though, doesn't mean the Cordoban Caliphate cannot play a role in European politics in the future. Realpolitik is older than people use to think. If the never growing northern Iberian Kingdoms fall under French influence, I expect the Caliphate to cooperate with England in some way. At the same time, the Ummayads are going to be in bad relations with the Ottomans or whoever takes their place, as both claim to be the true Caliphate.
By the way, would there be a chance for the Caliphate of Cordoba to retain or gain some parts of Northwest Africa?
Northern Morocco up to the city of Fez was usually part of the Cordoban Caliphate. It's likely to see the Ummayads as enemies of the Almoravids if the Caliphate doesn't dissolve in 1031 like in OTL, instead of allies. I suppose the Ummayads would conquer the Atlas after receiving gunpowder weapons like the Turks conquered the Middle East (among the reasons: more population, more fertile lands, more food and riches in general, more military and strategic innovations due to centuries of wars against Europeans, etc, like the Turks).
NOTE: I assume the Christian/Muslim border never falls under the Douro or as maximum the Guadarrama mountains. Otherwise it is probably too weakened to resist continuous pressure.