Socrates,
That's a question I've asked a couple times. I don't understand what the end game was. Spain could slice a little bit off Portugal, a little off the colonies, but overall there wasn't much Portugal had that Spain could take and expect to keep. It's possible they could use it to try trading for Gibraltar and/or Minorca, but a victorious Britain isn't going to be looking to give away holdings for the sake of another country, and a losing Britain is going to want to trade for lost possessions of their own.
Yes, I struggle for the same reason. Clearly in this period dismantlement wasn't completely off the cards, given what was planned for Prussia. However, Prussia was a new upstart, not an ancient historic power with long settled boundaries. I think the Algarve will be taken given its historic (albeit dropped) claims by the Spanish Kingdom. The Banda Oriental is another obvious example. However its traditional for what's taken to be roughly equal to what is given back, and that would suggest a lot more could be taken. Spain already has a weakening grip on its colonies so probably won't take large chunks of Brazil or Angola. Minorca makes sense, although the Brits will never give back both Western Med bases. Maybe they take the two Portuguese provinces north of Beira to aggrandise Galicia?