I think the main thing is he would be able to respond to discontent sooner, adopt policies that prioritized the interests of the Netherlands more, develop better situational awareness about who to buy off . . . not a gimme, but it does make the odds much better.
I agree. But at the same time, that's assuming he's a reasonably competent ruler - if anything, Ferdinand I's boys ran the gamut from competent (Maximilian II) to disinterested (Ferdinand II) - so if he were of a personality like Ferdinand II, for instance, it would be different to if he's of a similar personality to his brother.
Like you said Charles would probably have him raised in Ghent at a certain age. The Low countries and just countries/realms in general whenever they rebelled would play up the foreign monarch card. Charles had the revolt of Comuneros around his ascension to the HRE. I think the other key apart from what
@mrmandias said is Mary of Hungary.
She is present and she'd be a key resource in raising him as she herself was well liked and learnt from their aunt Margaret before her, both were very adept at keeping the low countries governable. Both Philip and Charles initially tried to pull away from these women and their political accumen but it seems they learnt those were unwise decisions and
generally followed their advice. The Habsburg's themselves aren't opposed to having their kids raised elsewhere when politically necessary or if they didn't have a choice e.g. Maximilian I having to surrender Philip to retain some semblance of influence in the Low countries w/o constant rebellion, Maximilian II leaving Rudolf II in the court of Spain, Ferdinand II HRE was raised in Bavaria etc (although all these examples didn't particularly end well)
Too bad Felipe II didn't keep that up when Margaret of Parma took over from the Queen of Hungary.
Well, for a wild-card, WI *Joseph, having lived in the Netherlands from childhood, and been influenced by that (more as a young adult than a child), becomes a Protestant along with his subjects?
The Hohenzollern and Wittelsbach families had Protestant and Catholic branches; why not the Habsburgs?
If this boy came from the Austrian/Imperial branch, maybe he'd be a sort of crypto-Protestant. Felipe II was usually pretty pragmatic about Protestantism abroad in general (he advised Mary against
burning heretics in England, for instance), but refused to allow it in his realm. He advised Caterina de Medici to rid herself of the Protestant scum surrounding her, and she sent back a very tart reply, Felipe didn't push the issue. Compared to his two sisters, Maria and Juana (one who said when returning to Spain she "was glad to be in a country with no heretics" and the other who is supposedly the only female
ever inducted into the Jesuit order), Felipe comes across as filled with warm and fuzzies for them (not actually, but you get what I'm going for).
To convert to Protestantism would be both a major boon and a a major millstone for this boy. OTOH he'd have a sort of parity with (part of) his subjects and be "relatable", and prove that he's not the taking orders from Madrid etc. OTOH, the majority reformed religion of the Netherlands was Calvinism rather than Lutheranism. Under the Peace of Augsburg, Calvinism was technically "illegal" AFAIK, and to convert to Lutheranism might be as much help as Friedrich V of the Palatinate's Calvinism was in Lutheran/Hussite Bohemia in the 30YW (although Freddie was also an idiot in many ways IMHO, but that's a whole other discussion). Felipe II's reaction to his brother's conversion (which might not even be seen as sincere by the populace he's ruling) I could imagine being similar to the family's reaction to Juana la Loca (who simply preferred a different form of Catholicism - Burgundian to Spanish) or Rudolf II (in both cases where the rightful ruler winds up deposed by their more suitably Catholic relatives).
Why are we assuming that the Netherlands would go to an ITTL surviving second son? Charles wore many hats in his life, but he was a Burgundian first. He might well place the Low Countries into the hands of Phillip, and push him forward as the Holy Roman Emperor rather than his brother and his heirs, and leave Spain to the second son.
Because Karl intended it to go to his daughter, Maria, as a dowry, but then decided against it. Also, he'd signed a deal with Ferdinand I (and the German electors wouldn't accept another a Spanish emperor, although they went with Rudolf, who as pointed out, was raised in Spain). So, in lieu of granting the second son Burgundy, Karl might do as he did in
@Kynan's Stewart Survival TL and give the boy the kingdom of Naples instead.
Wouldn’t Spain be seen as the greater prize for the first son?
Yes and no. AIUI, the Netherlands were pretty wealthy on their own. But Spain was a "kingdom" while Burgundy was a patchwork quilt of 17 different titles (IIRC).