Army:
Let's say Spain fields 400,000 soldiers by 1915. Netherlands will send 100,000 to the west front. Sweden will probably fight Russia with 100,000-150,000 troops. Let's say 25,000 Finnish nationalists will help.
With Sweden in the war Russia will be forced to mobilize at least 200,000 troops to that front.
France will be forced to send at least 350,000 to keep the Spanish force at bay in the Pyrennes.
Britain will probably send 50,000 troops to Gibraltar.
This puts the numbers in the favor of the Germans. Paris would probably fall in 1915. France probabl wouldn't surrender but it would be offer by then.
By 1916 France surrenders, Germany swings East. Possibly diverting some troops through Finland. Russia is now fighting a three pronged assualt. Russia will see defeat in Finland and German but victory gainst the Austrians.
Italy probably won't join the war.
U.S. may join allies after France falls.
Navy:
Spain will likely tie up at least a handful of British ships for a year or so. This would not really effect much but the German blockade might be a tad less effective. Gibraltar most definately won't fall. Or if it does it will be at the bottom of the sea first.
With the addition of the Swedish navy the Russian Baltic fleet will be trashed.