Alright, I have the first half of the update finished. This'll be another edit-as-I-write updates.
Part Thirty-Six: The Turning Point
The Virginia Campaign:
After the advances by the Union into Virginia and Arkansaw, the Confederate army went into a defensive position in the following spring. The Army of the Mississippi took back the Arkansaw capital from Seguín in April and restored the transportation link between Calhoun and the remainder of the Confederacy. The Army of the Carolinas retreated slightly from the Ohio River toward the hills of the Appalachians but maintained its presence in Kentucky. Seeing the ease with which the Provisional Army of Texas had moved into Arkansaw and Louisiana, the Confederate military also moved some corps from the eastern theatre to strengthen their position in the western theatre.
For the majority of the spring, there was a lull in Union movements and offensives. The only major action was an attempted landing and raid in Cuba, which was spotted early by a Confederate naval patrol. The Union was attempting to land at Daiquirí, east of Santiago on the southeastern end of the island. The cavalry corps stationed in Santiago was alerted and under Colonel Joesph Wheeler the landing party was driven back and forced to retreat[1]. Unfortunately, this small victory in the spring would not be much consolation for the Confederacy by the end of the year.
In early June, the Union began another offensive to capture Richmond and bring Virginia out of the war. This offensive, unlike previous attempts by the Union, was a two-pronged assault aimed with taking both Richmond in the east and the city of Charleston in the west. The Army of the Ohio captured Charleston on June 20th and the Wheeling Legislature moved to Charleston on the 24th. The state of Vandalia was proclaimed and by the end of the year, Vandalia became an official state of the United States. However, at the time of admission to the United States, not all the state had come under Union control.
After the fall of Charleston, the Confederacy dispatched Forrest to the west once again to take back the city. However, this proved to be a regretful decision by the Confederacy. Forrest was in control of a larger force than the one which he accompanied in the raid on Cincinnati and this left a smaller garrison in Richmond and the surrounding area. The weaker force at Williamsburg allowed McClellan to break through the Confederate defense line while Burnside advanced south from Fredericksburg. Continuing along the northern bank of the James River, McClellan was able to take Petersburg on July 15th cutting off the main rail link going south from Richmond. As McClellan was moving toward Petersburg, Burnside, now commanding the larger force in the Army of the Potomac, began the offensive south from Fredericksburg and reached Ashland on July 19th. The two parts of the Army closed in on Richmond and the city surrendered after a four day siege on July 27th. With Richmond and Charleston in Union hands, Virginia was for the most part knocked out of the war and Robert E. Lee was made military governor of the state.
The Confluence Campaign:
With the Union gaining ground in the eastern theatre, the Confederacy became desperate and in the summer of 1864 launched a large offensive in the western theatre up the Mississippi. With the Confederate purchase of a few small armored ships from the British navy, they had an advantage and sailed up the Mississippi from Memphis. Accompanied by the Army of Mississippi, the Confederates took many towns in western Tennessee and helped Chickasaw officially secede from the Union and join the Confederacy on July 2. Ten days later, the Confederacy defeated a contingent of Union gunboats in the Battle of the Confluence near the confluence of the Mississippi and Ohio rivers near Cairo, Illinois. Admiral Gustavus T. Beauregard, leader of the Mississippi Squadron, claimed victory at the battle[2].
After the victory at the Battle of the Confluence, the Army of the Mississippi divided, with one corps led by Edmund Kirby Smith moving up the west bank of the Mississippi and the rest of the army now led by Braxton Bragg moving east along the south bank of the Ohio. Smith's corps was joined by Claiborne Fox Jackson's Ozark Militia as they marched toward Saint Louis. The newly formed Ozark Corps went up the river and entered Cape Girardeau on July 15th, and continued north on the west bank of the Mississippi to Sainte Genevieve. As the Ozark Corps left Sainte Genevieve on July 20th heading for Saint Louis, the Union Army of Missouri crossed the river near Kaskaskia, Illinois using converted steamers provided by Cornelius Vanderbilt at the beginning of the war. The Army of Missouri cut off the supply lines to the Ozark Corps and began march toward Saint Louis following the Ozark Corps. Claiborne Jackson pushed the Ozark Corps north, and through a series of exceptionally hot days starting two days after leaving Sainte Genevieve. The corps was weakened through a wave of hyperthermia, and when the Army of the Missouri caught up with the Ozark Corps just south of Herculaneum, the Army of the Missouri easily routed the Ozark Corps. The ships that were sent with the Ozark Corps ran into trouble when the ironclad CSS Pensacola wrecked and ran aground on a sandbar in the middle of the river. The remainder of the naval contingent was forced back downriver by the Army of Missouri and Vanderbilt's steamers, and the CSS Pensacola was captured by Union forces.
In the east, Bragg and the remainder of the Army of the Mississippi reached Paducah, Kentucky by July 15th and found support there from the local population, who were sympathetic to the Confederate cause and had joined Chickasaw in its secession. Bragg attempted to push on from Paducah but were frequently stopped by the series of forts the Union had built on the edges of the Tennessee and Ohio rivers. Bragg finally managed to force the Army of the Mississippi across the Tennessee River fifteen miles upriver from Paducah on the 24th of July. Two days later the Army of the Mississippi took Cadiz, Kentucky and set up fortresses on the left bank of the Tennessee River. Afterward, Bragg focused his offensives on smaller raids further east and north. The higher scale raids took place on Hopkinsville and Smithland in Kentucky, and Cairo and Metropolis in Illinois. Cairo and Smithland were held for a few months by the Confederates, and one long-term raid in October reached Evansville, Indiana, over hundred miles into the Union. These may seem like great victories for Bragg and the Army of the Mississippi but the overall goal of reaching Lousiville, Kentucky shows how poor the offensive turned out to be from a strategic perspective.
The year of 1864 can be seen as the turning point of the war in military terms. The Union achieved their first major tactical victory capturing Richmond and bringing all of Virginia back to the United States, and the Confederacy became desperate in their offensives to the north. The failure to capture either Saint Louis or Louisville shows that the United States began adapting to southern war strategies and showed how cautious General Bragg was during the war. In addition, the inability of the Confederacy to push far up the Mississippi River or hold the confluence of the Mississippi and Ohio rivers for long exemplified the end of the naval advantage that the Confederacy had at the start of the war.
[1] There's a subtle reference here. See if you can figure out what it is.

[2] We know him by the name P. G. T. Beauregard, but he didn't use Pierre in his correspondences in the OTL Civil War.