This is all quite likely and I agree. Prussia will be in the unenviable position of juggling the national rivalries of east-central Europe. Which is why I think they prop up the Habsburgs to oversee whatever hodgepodge they assemble in the region. Thinking there would have to be some kind of army and coordinated foreign and fiscal policy in place. Dual Monarchy Lite.
The Habsburgs as a power would be spent, should Austria enter under a personal union with Prussia; the Hungarians would want nothing to do with them, memories of the 1848 Revolution still lingering amongst the citizenry at large, and Bohemia I figured would be given to another branch of the Hohenzollern family. No Independent Entity/State would result that would find a Hapsburg on the throne, as far as I figure. That said, it is probable that they would have been allowed to maintain their titles over Styria or Tirol, reduced to subservient Dukes or Counts.
Regarding the Hungarian Kingdom, if it is anything like what existed historically between Hungary and Croatia, it would mean a set of devolved Parliaments that would regulate local matters in each jurisdiction, with a national parliament managing foreign policy, international trade, defense, etc. The irony is that this would be far more functional then the Dual Monarchy, in that you'd not have competing governments which required unanimous consent to do anything. Elections to the Hungarian Parliament though could hardly ever be called liberal as the franchise was largely limited to the nobility, least their votes counted for far more, and gerrymandered to hell.
Wish I could make a proper map of what I'm envisioning here, but I haven't been able to find a proper base map to draw it up on.