Well, not practicing the great array of incest matches of the Hapsburgs is rather difficult as they inherited it from their Iberian forefathers (Philip II's first marriage, for example, was for his double first cousin Maria Manuela of Portugal, his son by her, Carlos, being just as damaged by inbreeding as Carlos II two centuries later) even before the number of suitable matches was greatly diminished by the protestant reformation.
The lack of said matches wasn't, in my opinion, exactly due to the lack of catholic houses but due to status: the major catholic monarchs (France and Spain/Austria) seem to have prefered marrying to dynasties of similar rank, which was a problem when most of the kingdoms of Europe decided to jump into protestantism (and seem to not be as interested in the territorial rank of their brides' families). So there would also be a need for the Spanish in special to look into those minor duchies
If the Hapsburgs managed to pull it up (probably having most of their brides come from northern Italy, so Medicis, Ferrara, Gonzagas, etc), We could see them being larger in numbers (the incest not dwindling the women's fertility), and so maybe have their territories be more divided over time (more relatives to send to serve as regents and viceroys)