There are so many misconceptions here that I have to wonder if you get your information about Americans exclusively from 4chan or something. While it is true that some Americans assume Spaniards look like Latin Americans, it's simply because they haven't interacted with Spaniards or looked into the people of Spain. Not that most people would even care whether the Spanish are white or not. Also, even people who know barely anything about geography, still know that the Spanish language comes from Spain. There is no sort of 19th century imperialist context that you seem to want to ascribe to it. Even vocal racists usually go toward more passive aggressive, dog whistle language instead of going full "uncivilized and inferior". Obviously with exceptions.
I know this is old, but talking about misconceptions...
Also, the most internationally famous cultural region of Spain is Andalusia, with Valencia a close second, and those areas are a bit darker skinned than the northern Basque counties. The world's image of Spain is from those famous places.
In fact, this is not true... There are important populations in Sierra Morena (Andalucia) that descend from German colonists settled there in the XVIII century. And basques are usually dark haired.
In regards to your alternate history suggestion:
like
@Doctor President said, "Hispanic" derives from Latin "Hispania". The Spanish word for Spain is also "España", derived from the same Latin term. It's not some random "His-" prefix.
The British did not have any special tendency to kill native peoples in the areas they colonized compared to other colonial powers. They had a different colonization strategy involving settlement/emigration of religious minorities instead of simple conquest. This led to a higher colonial population, which overused their own resources, and the colonists then pushed the natives off of their land. After the independence of the United States, genocidal acts like the Trail of Tears, Indian Removal, and near extinction of the buffalo (to damage the Plains way of life) were committed.
However, similar actions occurred in Mexico, during the Yaqui Wars and Caste War of Yucatán, as well as in Argentina, meaning brutal atrocities were not unique to the British colonial nations, although the US committed more of them.
The Spanish and Portuguese Empires were not particularly open minded about culture from anything but a 16th century context.
Where do the "Leyes de Indias" cope with this idea? Probably there were bad actions made by individuals, but the legal framework was something different.
As for being open minded to other cultures, let's see:
1492 - First Spanish Grammar
1530 - First French Grammar
1531 - First Nahuatl Grammar
1536 - First Portuguese Grammar
1560 - First Quechua Grammar
1581 - First English Grammar
1612 - First Aymará Grammar
...
If the spanish were not open minded to other cultures, why writing and publishing grammars for languages they despised?
Do you know it was compulsory for missionaries to learn other native languages before going to the Americas?
The conquistadors pioneered slavery and conquest in the Americas, and created a system of limpieza de sangre and the racial caste system.
I do not know who those conquistadors were, but I do know that a legal framework was created in 1510 an 1555 to protect the Amerindians. Probably it was impossible to implement it in a perfect way in the XVI century, but they tried.
I do not think they tried that "limpieza de sangre" thing as they melted with the amerindians (just have a look to the populations in México, Guatemala, Paraguay, Bolivia...). They married local women and local caciques were given nobiliary titles and accepted as peers.
While they allowed intermarriage, it was mainly because they were unable to bring significant amounts of Spanish women to the New World. The goal was resource extraction, not cultural assimilation except to eliminate traditional or idolatrous practices.
The goal was evangelization and cultural assimilation. Universities, cathedrals, schools and hospitals were built.
The Inquisition that also dealt with forgery, bigamy and piracy had a minimal impact. In New Grenade only 3 people were killed in three centuries!!
Spanish language actually only became the majority in most countries in Latin America after independence, as the new nations pursued a policy of blanqueamiento. Back in the colonial era, there were a few Dominican and Franciscan friars and Jesuit priests who stood up for the rights of the natives, but they were often ignored by colonial lords.
First part true, second... false. They were so ignored that Charles V ordered to stop conquest until a commission that met in Valladolid decided on the issue. He even considered abandoning conquered territories!
Vicerois were subject to the "Juicios de Residencia" after their mandate ended, and anybody (including natives, of course) could testify against them.
The French were probably the most liberal colonizer in mainland North America with their emphasis on trade. But if they had sent more settlers, the need for land would have led to more significant conflicts with native polities. New France had the highest growing population of any European colony at the time.
The Dutch were only liberal colonizers in North America because they could barely get anyone to settle company ruled New Netherlands. Their rule in South Africa and Indonesia was not liberal.
Cortes did not conquer South America, only Mexico. Pizarro was the one who conquered Peru from the Incas, and that expedition was rather lucky in its timing. Another kingdom besides Spain is unlikely to replicate those circumstances.
Belgians and Italians had absolutely no chance at colonizing the New World in the 16th century unless it was through the Spanish Crown.