Seeing this thread has made tempted to bump it up.
Would Ottomans be able to conquer Persia under Selim I ? I think there's a fair chance. The longer Selim's reign, the more likely it will be.
Would Ottomans be able to hold on to it ? I don't see why not. But I think we should instead look at how much of Persia that Ottomans can hold on to in the long term. At best, I think OE can firmly hold onto chunk of Persia west of Kavir and Luth deserts. Actually, I'm not even sure that Selim would've managed to reach Khorasan, but I think it will be more the issue of "can he be fast enough to reach there before someone else does?" CMIIW, but IIRC the Shaybanids were still around this time.....
What will become of Ottoman rule in the area ? I think that Ottoman control in the region will be comparatively more relaxed compared to the other parts of empire. And also. I think that the fate of Persian Qizilbash will contribute significantly to this matter.
What effect will process of Persian conquest bring to the other places ? I don't think it will give anyone the golden chance to strike OE's back when they're busy elsewhere. I think it will slightly to briefly delay the conquest of Egypt. Maybe it will make Egyptians slightly more prepared to face Ottoman invasion ? Also, during this period of delay, little things can happen. Depend on what it is, it can be something with consequences pretty much limited to Egypt only, or maybe something more, especially when it has to do with the remaining Abbasids that at that time residing there.....
IIRC, the Mughals owed the Safavids for its survival for they provided refuge to Humayun while Sher Shah Suri temporarily overthrowing the Mughals, and then aiding to take their kingdom back. What will no-Safavid situation do to this ?