This is an AH question that has been bugging me so far. It seems that England and Scotland seem to be destined to be united, especially if the POD is within a century before the OTL union of the crowns. Was it really that inevitable?
Not really. The Scottish had a long history of being, well, not exactly a strong state but certainly an independent one, though influenced by outside forces. Its certainly possible another state could have scooped up Scotland, either directly (Denmark, Ireland) or de-facto (France), or the Scottish could have played off the various factions to remain independent.
I think a common trope of AH.com for an independent Scotland is for it to have colonies in the New World (the Darien Scheme usually), but IMHO it would have been better for Scotland to focus on herself during the 17th century.
A (relatively) isolationist Scotland would make sense, actually. In order to do so would involve a series of adept Scottish rulers and nobles, in order to play off, say, the English and the French to maintain independence.
I don't think they were destined to be united, but 16th century politics, at least in England, had always pushed to ween Scotland away from the Auld Alliance. Henry VII directly started the trend with the marriage of Margaret Tudor to James IV and the Treaty of Perpetual Peace, with the full intention of bringing the Stewarts into the English succession. Henry VIII's abrasive attitudes and religious reformation saw Scotland seek out French friendship once again, but even Henry VIII tried to bring the countries together through Mary Stuart and his son Edward VI. Even Elizabeth had her own schemes as the Treaty of Edinburgh threw out the French and established a Protestant Scotland that would ally with England.
Scotland was in a poor situation though, definitely. A virtual century of Regencies, with King's being cut down in their prime and the flower of the nobility too. Long Regencies were the aristocracy could entrench themselves. The Scottish crown during the time of James V only had a direct income of about 17,000 pounds; Mary de Guise's French dowry was a large help, as did Mary Stuart's jointure of 60,000 francs as Dowager Queen of France. There was also no direct taxation in Scotland: Mary Stuart's reign only saw one direct tax, and that was to pay for Prince James' Christening. The long regencies had also seen the crown impoverished, and one reason to fear Mary coming of age was because at twenty three she would be able to take back certain lands that had been leased out to the nobility (I forget the term, but Antonia Fraser's book covers it quite well). Scotland also had no standing army and relied upon the feudal hosts of the great nobility... but again, given Scotland's financial situation, she couldn't of afforded a standing army anyways.
The long Regencies had created an impotent crown and a powerful class of feudal landowners and clans who were all invariably connected by marriage. The Stewart King's were essentially first amongst equals and not without connections to the aristocracy given the numerous bastard children that married into the noble families or older Stewart Prince(esses) that they had married into the noble families as well. Elizabeth's position in 1559 was not revolutionary. By tossing out the French and establishing the Lords of the Congregation, she was essentially restoring the natural order in Scotland where the nobility reigned.
It's pretty telling when the first king of the Stewarts named James who died in old age was the one who was also King of England. Say, would a different Flodden (could still be a Scottish loss, but James IV survives) change circumstances enough?
Maybe, but the big issue was Scottish Kings who tended to try and change the system and crush the nobility were often killed in their prime and saw all of their work undone. James IV was one of those. The biggest issues are the crown's poverty and inability to tame the nobility. Fix the poverty and you can invariably tame the nobility.
The poverty I think is one issue that can be fixed; Scotland is never going to be a hugely rich country, but unlike in England or even France, the crown lacked royal lands to draw revenues from, and the lack of direct taxation hurt as well. In many ways, sixteenth century Scotland had a political system much like twelfth century England. James IV might be able to fix the crown's poverty, but you may need to go back to James I or so to be able to establish a royal demesne to draw income from. Another issue is the church, for if we had an alternate James V, we could've seen him coopt the Reformation much as Henry did, using Church lands to enrich the crown.
The Catholic Church in Scotland was notoriously corrupt, especially in regards to priests living with their mistresses and then passing their benefices off to their bastard children. With a surviving James IV, perhaps the Reformation/Church lands would be the best way to empower the crown. Catholic holdings in Scotland amounted to about 200,000 pounds per annum, the same kind of budget that Elizabeth had to work with. Passing a even a portion of those lands into royal hands would give them a portion of income to work with. If they can establish a standing army, they can curb the nobility. For if you create a force loyal to the crown, a regency is a less drastic thing capable of undoing everything they have worked for.