Jane Seymour having children means Mary is marrying, Mary is not a threat to the children of Jane.
Perhaps Joanna of Spain could still be an option even if Edward remains a Protestant? It wouldn't be the first time a Hapsburg princess/Queen/Queen-in-training remarried (Eleanor of Austria). In some ways, I think it might be a better alliance for England than one with France, because sooner or later, the French are going to retake Calais.
No, Philip's first wife will be always Maria Manuela of Portugal (and Joanna will always marry first in Portugal)... Both countries need that match too much for consolidating the allianceWhat about Mary I being philip ii's first wife and Edward marrying Joanna.