You should add some thing that is about like the "oncoming civil war", maybe it would boost popularity, maybe its forts. maybe its factorys. Something the player would do as a emergency measure to AID in the civil war, NOT stop it.

For Nationalists focuses to either stay neutral or join the Axis. And maybe some focus for slow democratisation and replacing Franco with a king.

Considering Spain's historical role in WWII, choosing to stay somewhat neutral and lowering the required divisions required to send volunteers (presumably to Germany) and also having the choice to simply join the Axis somewhat early (which most players wouldn't do, likely opting to recover their army first) would be really nice.

Considering the landscape of Spain having a Mountaineer focus would make sense. Considering the amount of Tungsten in the Iberian area perhaps having some advances in artillery would be nice as well.

Having Conquer focuses against the UK, for Gibraltar, and Portugal would be nice. Maybe having the Conquer focus for Gibraltar be an effort to cut off the Mediterannean from the Allies. As either Republican or Nationalist Spain. Putting the Conquer focus along with the Naval focus would be nice.

I don't think Spain should be able to create a faction. There aren't many nearby nations not already in a faction unless you would consider making a faction with only Portugal. You could add the option but perhaps give Spain Detterance or something if they choose this route for better defense.

Capturing Portugal is not a good idea, as both Franco and Salazar had good relations, and the Spanish would probably be more likely to want revenge on the US for stealing their colonies.