German settlement is hard to determine. However, one interesting thing that applies to this scenario is that the vast bulk of the spread of literacy in Eastern Europe happened after the creation of the Soviet Union. According to Wikipedia, in 1917, within the remaining Tsarist territories, an estimated 37.9% of the male population above seven years old was literate and only 12.5% of the female population was literate. By 1939, however, male literacy was at 90.8% and female literacy had increased to 72.5%. By the 1950s, with a stable education system and an entire generation that had at least completed some form of lower level education, the Soviet Union had reached a literacy rate of 100%.
Would all those people who became literate in that period, be reading and writing in German? Or would they learn literacy for Ukrainian, Belorussian, Latvian, Lithuanian, Estonian, Yiddish?
Not that much, rather zero. People go where the jobs are & this is the Rhineland not a hypothetical Baltic duchy. Even before the war Germany hired foreign workers. Certainly there will be a few who would settle in Germanys sphere, but you hardly get enough people for a polish border strip or Gotenland.
Well, Germany would have higher purchasing power, and land in Belarus for example would be cheaper than land in Germany.
If a great industrial growth occurs in Mitteleuropa, like in the Soviet Union, then that would lead to a large demand for skilled and unskilled labor. It depends on policies, of course. Industrialization may be delayed due to the agrarian motivations for acquiring puppet states from Russia.