Is anyone aware of any reason Margarethe wouldn't be able to give Fritz heirs? Like for instance, her daughter's birth rendered her barren? Or is that something else that can be handwaved since we have no concrete evidence that that was the case?
It might be that Margarethe's second marriage was simply not long enough for there to have been children. Although, to be fair to Margarethe, her mother only had three, her maternal grandmother only one, and her paternal five/six, of whom only two survived infancy. (I mean her brother seems to be a case in point, he's rumored to have been quite the Casanova among the ladies (something that made his mad wife even madder), but there's no record (that I've found) of any bastard children (and I
really don't think that condoms were a big thing amongst 16th century royals).
But I think Gretchen will be able to manage at least three.
As to her take on the Reformed faith - she seems to have been a case of live and let live during her tenure in the Netherlands, but it could simply be that the faith wasn't established enough as opposed to her niece and great-niece's governments. However, a marriage between Fritz and Gretchen it might make for interesting times. For one, Fritz would have no reason to side against the emperor and co., so he might just turn Martin over to whoever the minute it starts getting too hot under Rome's collar. Especially since Leo X's only reason (that I'm aware) of awarding him the Golden Rose was as sort of a bribe to encourage him to stand in the 1518 Imperial Elections against François I of France and Carlos I of Spain.
However, having little half-Habsburgs on the Reformed side could make for some fun. Especially once the Reformation gathers momentum. None of the German princes at the time of the Reformation (besides Bavaria (which stayed Catholic) had any closer link to the Habsburgs than the generation of Holy Roman Emperor Friedrich III. In this situation, the non-Catholic party makes can claim that the Habsburgs have neglected imperial government in favor of Spain/Burgundy, and at the next election push forward a half-Saxonian, half-Habsburg princeling as a candidate for the throne. True the Hohenzollerns wouldn't go for it (their running feud with the Wettins being ironically what kick-started the reformation (Albrecht, Archbishop of Mainz being a Hohenzollern, who levied church taxes in Germany to pay for his purchase of his cardinalate)), but the only support the Habsburgs
might have are them and
perhaps the king of Bohemia (if he isn't a Habsburg). IDK how the Wittelsbachs might take it, but as I say, things could start looking interesting at the next election.