What if the US never gets the Gadsden Purchase? How would this affect the development of American Southwest? And how would this affect Mexico?
The purchase could conceivably be blocked on either the American or Mexican side.
On the American side, the Senate refused the ratify the first version of the treaty, and only narrowly ratified the revised version (33:12, three votes more than the 30 needed to ratify). You could firm up opposition a bit with a different Compromise of 1850: a better deal for the South could induce increased Northern bitterness and stronger opposition by Northern Senators to southern expansion, or a bigger compromise that also organized the remainder of the Lousianna Purchase into territories would make it so the North wouldn't need Southern support to get the Kansas-Nebraska act through and would thus be less restrained in blocking things Southern Senators wanted.
On the Mexican side, the obvious reason to refuse to sell would be national pride and a desire to avoid adding to the humiliation of the Treaty of Guadalupe Hidalgo. OTL, Santa Anna sold because he needed the money and because he feared the US would just seize the area in question if he refused to sell. Tone down his reason to fear a bit (triggered in part by a filibustering expedition by William Walker into Baja California -- kill off Walker earlier, and this isn't an issue), and reduce his need for cash (not sure how, but there's probably a way) and there's no reason for him to sell and risk the political fallout. Alternately, avert Santa Anna's return to power, and the alternate Mexican government would likely have different priorities than Santa Anna and the sale might not make sense to them.
On the Mexican side, the obvious reason to refuse to sell would be national pride and a desire to avoid adding to the humiliation of the Treaty of Guadalupe Hidalgo. OTL, Santa Anna sold because he needed the money and because he feared the US would just seize the area in question if he refused to sell. Tone down his reason to fear a bit (triggered in part by a filibustering expedition by William Walker into Baja California -- kill off Walker earlier, and this isn't an issue), and reduce his need for cash (not sure how, but there's probably a way) and there's no reason for him to sell and risk the political fallout. ....
This would screw over San Diego, as it would make San Diego much harder to get to by rail, probably to the benefit the other four of the "big five" pacific metropolises (San Francisco, Los Angeles, Portland, Seattle and San Diego). We might end up seeing one of the Minor ports growing far larger than OTL to take advantage of the gap in the market (Monterey/Santa Cruz is a fairly good bet, but they're rather close to the Bay Area, and would need a full continental railroad. Another bet would be Eureka/Acrata which had pretty decent rail connections that could be made better.).
Eureka/Arcata no way. It is too isolated and surrounded by mountains. There isn't any room for growth in the hinterland. The rail and road connections aren't great, and even still, they come up the coast from the bay area, not from the valley over the mountains.
Well I imagine that Mexico would be a rather more content place but Santa Anna would probably not be in power without the extra money. Northern Mexico, especially Sonora, would feel less betrayed by the central government and would probably be more developed and cooperative and have less strife developing their such as the inevitable cartels to come in the future.
As for the United States, I think the Eureka-Arcata line makes sense as FDW imagined it.