a) The Ottoman army is just, hands down, better than the Iberian one at this point. The Spanish army is improving, yes, but in a stand-up fight they have no chance. The Ottomans are more professional, better trained and equipped, and have better logistics.
Circa 1500 you're absolutely right. However, I don't think the Ottomans ever operated in North Africa in the same manner that they did in the Balkans. If I recall correctly, Ottoman-ruled North Africa was mainly through proxies and local allies, not a directly ruled province of the Empire.
The Spanish are going to be operating much close to home in North Africa.
b) Iberia, in 1500, was not particularly rich. Again, it was doing better, with its conquest of Italy by the 1530s, and the loot from America, but neither of those has happened yet (and, in order for the Iberians to campaign in North Africa, are almost ruled out).
Oh, I don't think that North Africa rules out North America. I think the choice of Miguel was so that there was no familial entanglement in Germany. So Spain can follow the same colonial trajectory vis a vis the Americas (ie conquer Aztecs and Inca and start draining the wealth of the Americas into their own coffers), and then when they start funding and fighting wars, it is in Italy and North Africa, versus Italy, North Africa, and Germany (OTL).
c) Which leads us to the most important point: France ain't going to take this lying down. If the Iberians go into North Africa in a big way, the French are going to take the opportunity to kick the Iberians in the, erm, Italy. And you'd need some big changes in Iberian decision making to make North Africa more important than Italy.
I think that taking Iberia out of the equation of the Valios (sp?) -Hapsburg Wars will change the way those wars play out. Specifically, the main bone of contention between the two families was the Burgundian inheritance. With the survival of Miguel, this continues to be a major bone of contention, and the Burgundian inheritance becomes the western half of the Hapsburg domains. Now there is probably going to be an alliance between the Hapsburgs and the Iberians against the French, to limit their gains in Italy, but its possible that with Iberia focused on its colonial empire and its self-appointed divine mission in the Med, the French simply focus on taking as much of Charles the Bold's old domains as possible, rather than poke the Iberians for limited gain. What I would imagine for the latter scenario is that the Iberians and French come to some kind of understanding, and the French are recognized in Milan, while the French recognize the Spaniards in Naples and Sicily.
A no-Hapsburgs-in-Spain TL would indeed be kind of neat. However, it wouldn't change the fact that the Iberians just can't go toe-to-toe with the Ottomans for the better part of a century more.
I agree they can't go toe to toe for some time. But I think that removing the Hapsburgs from Spain could end up having the effect of focusing many more of Iberia's considerable resources on fighting the infidel Turks rather than the heretic Germans.
You have got to be kidding. The OTL battle between the Ottomans and Spanish resulted in Ottoman Algeria. You actually think Spain has any chance of taking EGYPT?!? Not going to happen.
The problem with the scenario is just that Spain reached it's height at the same time as the Ottomans, and Egypt is heavily populated and Muslim. It's just not conceivable.
Algeria is possible, and possibly Tunis - a POD might be something in Persia keeping the Ottomans occupied. But you aren't going to get anyone to move from Iberia to North Africa, especially with all the vacated land just taken in Iberia, and North Africa has too large a population to have any hope of expelling.
And frankly the idea is a bit revolting.
OTL the Spaniards were able to decisively defeat the Ottomans at Leponto, while also engaged in large and expensive European projects brought on by the Hapsburg connection. So what I'm imagining is that the armies Philip II (during whose reign Leponto occured) fielded against the Dutch are instead being fielded against the Ottomans. The whole focus of the Spanish monarchy in this scenario is east, not north.
You're definitely right that the Spaniards have little hope of being able to settle North Africa with enough Christians to create the basis of a long-term occupation. There were enough people to make it difficult to rule, but not enough to make taxing them a reason to stay. What Egypt offers is a large enough population that taxation becomes reason enough to stay. Plus, having control of Egypt holds out the possibility of controlling the Red Sea and potentially much reducing the communication time with the Portugese (ruled by Miguel & heirs) colonies in the East Indies.