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I actually disbanded my entire fleet and reduced my army so I could make more cash per month. Use this time to also solidify your hold on your colony up north by finishing it and changing it's culture.
When you can save about 700g or so build about 12 large ships and go to war using your navy to prevent Denmark from reaching you. Occupy Denmarks provinces near you with the minimum required to siege and prevent them from building troops up there.
Now send your main army at Norway and destroy their force. Use some mercs in your main army to beef it up and to ensure early success. You will be losing money every month so disband the mercs once you feel comfortable with the situation.
Make sure to grab all of Denmarks provinces near you and Norways capital so you can get a couple of your cored provinces out of the peace deal.
For ideas I recommend Diplomacy first followed by Offensive and than an admin idea. I picked Religion here but in hindsight I don't think I really needed it even though it did come in handy a few times. But taking the economic idea is probably a good choice instead.
Teching up you want to focus on unlocking admin techs so you can get your first idea and also focus on mil tech to get the better units. This is why I always pick a diplo idea first because those monarch points are easier to horde early on so you can fill out that idea line pretty fast.
Wouldn't reducing your army be a bad thing for you considering that when you rebuild it, that costs manpower that could be used to reinforce? Unless you mean reducing maintenance, which you should do anyway.
An alternative is to get about 20 troops (I might have had less) and make sure you beat Denmark to Skåne after declaring war of independence. That way Denmark gets the crossing water negative modifier and you can beat them back before they can combine with Norway. Most likely you won't be able to chase them down and crush their troops though, unless you have your navy strong enough to keep theirs in a harbor. It's a riskier way of doing it, but it can be done.
The biggest benefit of going down the navy superiority route is that you can use it to prevent Denmark from interfering with your conquest of Norway as well as preventing that route of attack later in the game by any other enemy.
You need to wait about 15-20 years or so. Using mercs to bolster your main army for your offensive will solve any mp problems. Plus having a larger army (even if maintenance is lowered) is still going to add up. But since your army starts off not all that big anyways you can go either route and be ok.