My guess would be at least three languages as well (depending on the level of peninsular centralization): a peninsular *Castilian, a peninsular *Portuguese, (with larger mutual influences than IOTL) and a colonial language, starting off with a more Portuguese substrate but becoming increasingly...
The Counter Reformation was meant to attack SOME of the reasons Protestants left the church and to expand the reach of missionaries. Not to directly attack Protestants.
Mass in vernacular would have been seen as a heresy. Though it's possible (even likely) that the Anglo Saxon church would have developed its own local usages, especially if they didn't import many foreign educated clergy. As for turning to the Eastern church, I think matters of distance and...