I think you'd need to have Castille and Aragon unite earlier. Their frequent wars pretty much killed any dream of a Spanish empire. Portugal, however, did make a sizable empire, and if it had united with one or the other of the Spanish nations it could have been much larger.
Well, sizeable the Portuguese Empire it was. In paper.
For about the hundred years it lasted.
The Portuguese never had enough manpower to develop it or, when the push came to shove, to defend it. I do admire the sheer gall of claiming the whole of Brasil, Caribea and the Mar dos Mayas when they only had outposts on the coasts and small ones at that.
Of course, and as was inevitable, as soon as the English backstabbed Portugal by allying with the Burgundians and the Austrians (and let's not forget the commercial favours bestowed on the electors of the Holy Roman Empire), the Portuguese claims were divvied up pretty quickly.
English and Scottish historians like to call that the Forty Year War. Big misnomer as we know in Spain. It really lasted twenty years and was inmediately followed by from Castille and Portugal trying to take the other out.
It was inevitable that in the 19th of April 1642, after three hundred years of conflicts with Castille, Aragon, which had sat the war out, would take advantage of Provence, Savoy and Genoa being busy with the Burgundians and the rest of the allies grabbing land in Brasil to make its move.
The plan as devised by the chief of the Aragonese Army and Magister of the Royal Order of Montesa, Antoni de Cartagena, was to push the Castilians out of Vizcaya, La Rioja and advance into Cuenca and Albacete from Murcia to create advanced positions to defend the Ebro, Jucar, Segura and Turia river basins so Castilians could no longer attack from the mountains.
Nobody in Aragon and least of all the Magister had any idea what they would find.
For months the only news we had of the war came from refugees from the Castilian plains, begging in the outskirts of Valencia.
Plague had decimated the once proud cities of Sevilla and Cordoba. Granada, once a jewel of a city, had been burned to the ground. Whole forests had disappeared in smoke, and armies had degenerated into famished bands of thieves.
An army that was supposed to meet heavy resistance met with little but ashes and corpses. When the campaign finally ended after two years the Aragonese troops finally planted the flag on the husk of what had been the proud city of Lisbona, legend says that De Cartagena cried himself to death from all the misery and death he had seen. (In truth, he was sixty-two at the time and had had three bouts of disentery already so anything could have brought it. Probably post traumatic stress disorder)
But well, as some of you know, Martin the IV was crowned King of the Spains in Barcelona the next day of Saint George, 22 of April 1645, which is our national holiday. The capital would not move to Xibilia(1) for another hundred years.
Indeed it might have been interesting to see all those needless conflicts never take place. Perhaps then, Castilian would not be a language in danger of disappearing under the pressure of Spanish. Castile was, after all, the most populous nation in Spain before the wars, and had a copious and interesting literature. Imagine a Spain with Castilian as its most widely spoken language... could it have supplanted the Aragonese and Leonese-Portuguese romances, rather than the reverse happening? Would Castilian be known as Spanish then, rather than Catalan?
It is strange to think that Castilian, rather than a minority language in the north of Spain, could be spoken in the streets of Mançanars, Tomellòs, Madrit, Càssers, Badacós, Xibília or Córdoba(2)... it would probably would have evolved beyond recognition!
Perhaps without the repopulation and recovery we would have been able to walk side by side with the rest of nations of Europe, like Occitania, Burgundy, England, Scotland, Poland, Austria and Algemenia.
The only reason we survived as a nation afterwards might have been because, apart from wine, we had nothing they wanted... and like we proved first to the English pirates when they came to our shores and then in turn to the Burgundians, the Ottomans, the Scots and the Poles.
We had enough fighting here to last until the end of time.
Whoever comes here looking for some of it, will get it in spades.
A greater Spain. Certainly. But, an Empire? Too much of a stretch.
(1)OTL Seville, after the name has been adapted into the Catalan orthography
(2)OTL Manzanares, Tomelloso, Madrid(3), Cáceres, Badajoz.
(3)ITTL Madrid is a big village known for having been the capital of Armenia. Manzanares and Tomelloso are the booming twin rival capitals of the Manxa plains and of wine production worldwide, with the two best cricket teams in Spain.