It doesn't sound too plausible. Besides another option could be that Ferdinand ends up with Austria & Burgundy/Burgundian Netherlands and that he would focus on the Empire instead. In fact Ferdinand was briefly considered as the candidate for the position of HRE instead of IOTL Charles V. Though later IOTL Ferdinand was elected as his successor and even governed the Empire in his brother's absence with great autonomy (however in certain matters Charles did want to keep a say.
Charles had inherited the Crown of Castille and the Crown of Aragon, which both were more valuable than the ancestral collection of lands of Austria-Burgundy. If you want to switch Charles and Ferdinand, then you probably need their grandfather Ferdinand of Aragon succeeding at making his grandson Ferdinand (who grew up in 'Spain') the heir to the Spanish kingdoms.
In which case Charles will keep the rest of the inheritance and he probably ends up marrying Anna of Bohemia-Hungary instead, which makes more sense if the dynastic policy is more focused on the HRE.
Agreed; but I took the easiest POD-approach: different personality on a royal leader. Switching Charles and Ferdinand wouldn't matter under these circumstances.
For a 16th century scenario, I think two things are pivotal: prevent the terrible division of the Habsburg-realm into Spain/Low Countries vs German Lands/Italian lands. I have no idea why it seemed like a good idea.
Pivotal for a German National State is, even at this state, to separate it from Italy, as hard as it sounds. I agree totally with all the posts which stress that. And it would be very helpful if the (Austrian) Habsburgs come out as Protestant. That would completely crsuh the balance in 16th century Germany and prevent the drain the religious conflict was.
A different division of the Carolingian Empire and/or the Lotharingian partition could work. Perhaps something along the lines of Italy, Provence and the Imperial title going to West Francia and the rest going to East Francia, which would then probably develop into a Kingdom of Germany further down the line.
On a map, that looks good, yes. But actually, prior to the wave of urbanisation in the 13th century, that would be severely imbalanced. Only a comparatively weak realm would be there for such a ruler.
The best option would be that Otto I does not conquer Italy and doesn't form the HRE in the first place.
[...]which could well lead to an unification in the early middle ages. Whether this unification would lead to a more absolute state like France or a more limited monarchy like in England is up for debate.
IMHO, such an early unification is dubious to last. Why? Because it would rather coincidentially be national. Germany would still be feudal, like the rest of the medieval world, and the last word here is about dynasties.
Thus, a united Germany would still be prone to divisions, regional upstarts etc.
