I don´t know enough about Heinrich and von Hollmann to give you any definite answers.
The little I know about Heinrich is that he was a naval officer (and navy supporter), interested in new technologies (submarines, airplanes, cars) and a much better diplomat than Wilhelm II. Which means that German foreign policy probably will be spared quite a few embarrassments.
I´ve no idea about his foreign policy. Would he pressure to renew the
Reinsurance Treaty with Russia in 1890? Would he pressure for an "understanding" with the British Empire?
Von Hollmann? If Wikipedia is to be believed he was a proponent of a mainly cruiser based navy, horrified at the thought of a war against the British Empire and would have preferred Amoy (Xiamen Island) over Tsingtao as an Asian naval base. He retired in 1897 when the Reichstag voted against a proposed (desired by Wilhelm II) increase of the naval budget.
After 1900 von Hollmann might have the support of rear admiral, later vice admiral Karl Galster.
Colonies?
Not much change possible there I´m afraid. By 1888 most of the world is already claimed. What´s still possible is an exchange of territories / claims. Like the Sansibar - Helgoland exchange between Britain and Germany. Or offering to buy some territory.
Ship construction / naval and foreign policies?
The largest changes would be here.
At home you´d see coastal artillery, mines, torpedo boats (and submarines) to defend the German coasts. Plus a battle fleet roughly the size of the French or Russian one to defeat any attempts of a close blockade.
The "
Kaiser Wilhelm canal" will still be built and later on widened. Wilhelmshafen, Kiel and (as a distant third) Danzig will still be the three major German naval bases in Germany.
Abroad you´d have the cruisers.
According to a
German navy website you could build 2 armored cruisers or 4 small (= light) cruisers for the cost of 1 predreadnought in the 1890s. And 4-5 light cruisers for the cost of 1 dreadnought later on.
However the cruisers in your TL quite likely would be more expensive than the German cruisers in OTL. Simply put they need more range. And quite likely larger guns too. A switch from 4.1" to 5.9" guns earlier on.
The problem here is the location and development status of the German colonies.
(Plus the "Hague Convention (XIII) concerning the rights and duties of neutral powers in naval war" happened only in 1907. Before that, neutral powers could simply close their harbors for belligerent warships. After it, belligerent warships were allowed to enter a neutral harbor for coal, food and water, not ammunition.)
Quite simply put:
- a war against Russia will be decided on land. Plus closing down the Baltic Sea against the Russian Baltic fleet.
- a war against France will be decided on land in Europe. Any German colonies lost to French colonial troops can be regained after winning the war in Europe.
- it´s the same for a war against both France and Russia.
- in any war against the British Empire it´ll be incredibly difficult to defend any German colony. And cruisers - sooner or later - will need a half decent naval base for maintenance, repairs and supplies.
So what should a smart Heinrich and von Hollmann do?

Some suggestions:
- At home you´d see coastal artillery, mines, torpedo boats (and submarines) to defend the German coasts. Plus a battle fleet roughly the size of the French or Russian one to defeat any attempts of a close blockade. Simple common sense.
- Use some of the saved money from not building that many predreadnoughts and dreadnoughts to enlarge the army. Essential in any European war but difficult with the attitude of the Prussian Junkers. (It would mean more non-noble officers.)
- Keep Britain friendly or at least neutral. That means be involved with the war plans of the Prussian general staff. They create war plans with total disregard to foreign policy implications (Schlieffen - invading Belgium to defeat France for example).
(As an alternative, keep Russia friendly. Difficult while being allied to Austria-Hungary.)
- Use some of the saved money from not building that many predreadnoughts and dreadnoughts to create secondary and tertiary naval bases in the German colonies. Plus maybe buy or exchange some colonial territory for some Spanish or Portuguese colonial islands?
That would include enlarging the size of the German naval infantry (3 battalions peace time in OTL) and German colonial troops.
I define a tertiary base here as having some coastal artillery, some mines, a small contingent of naval infantry, maybe some old torpedo boats plus a supply depot. Simply put, you´d need more than the appearance of a cruiser to force them to surrender. So they might survive for a few weeks or months?
A secondary base would have more and larger caliber coastal guns. Mines stored plus old torpedo boats. Some submarines. Larger supply depots plus some repair and manufacturing facilities. Large contingent of German naval infantry plus German colonial troops. Simply put they hopefully can survive for 1-2 years?
- Once the dreadnought revolution happens the oldest predreadnoughts are practically obsolete. However their guns would be perfect as coastal defense guns in secondary naval bases. Plus, their mess rooms, showers, repair shops and storage rooms would make them perfect depot ships...
- Given the lack of secure German naval bases overseas the introduction of "fast" naval supply ships might be a good idea?
- Introduce a subsidy to the German merchant fleet so that some merchant ships can be easily converted to armed merchant cruisers or armed supply ships in case of war?
Quite simply put, in any war not involving the British Empire, the outcome of the war will be decided in Europe. On land. If the war involves the British Empire, the German cruisers (and German naval bases) will be lucky to even survive 1-2 years.
Without a large German battle fleet the slower British warships can escort convoys while the fast British dreadnoughts ), battle cruisers (after 1910) and cruisers can hunt down the German cruisers.
Pre-WW1 Germany could win a war against France and Russia. Diverting lots of needed resources to create a cruiser based German navy won´t help once Britain joins the war against Germany.