The Austrian Habsburgs approach to religion was somewhat different from their Spanish cousins, but not much and also had to do with the political reality and power. The Austrian Habsburg, also played the long game, since they had less resources than the Spanish Habsburgs. It doesn't mean, they had no wealthy possessions and this ITTL would be augmented by Burgundian Inheritance.
If the Austrian Habsburgs still inherit Bohemia and Hungary, then I can see a Habsburg Holy Roman Emperor having his Imperial Court in Vienna or Prague, but once elected a Habsburg King of the Romans could have his Royal Court in Brussels (probably also before his election, since being made Governor of the Habsburg Netherlands, once he reaches adulthood, would be useful training ground).
To crush the revolt might still entail some Spanish involvement, directly and indirectly, also to keep France at bay. It's also possible that the Revolt can be averted from reaching the point of no return. Certainly at the beginning of the conflict the majority was still Catholic, but they liked the Protestants did share some political grievances. If the Austrian Habsburgs, avoid some mistakes and manage to compromise on some other political issues, thus making the conflict mostly about religion and much less about politics, that would also greatly help.
As for an alternate Germany, only as an autonomous region with Dutch being recognized as an official language.