The Swedes will absolutely not like having Kiruna occupied. This is their number one export money bringer. And if they do nit fight the Germans will be more than happy to „assist“ them.
And actually the allied troops are in a terrible situation. There is just this railway track to get supplies to them and just one small harbor. Rommel found out the hard way OTL that this is not a good position. And nobody would have believed it was done to help the fins. Maybe a regiment, msybe even less you can supply via Narvik, Kiruna and then the northern end of the Baltic.
It's irrilevant that they believe it or not, the choice are let them do it and trying to mantain an official neutrality or become a member of the entente (as they are already in very close contact of the Axis) or fight the entente and invite the URSS and the Nazis...sure not that great choice and as i said they are between the rock and the hard place still is neither simple or automatic.