will Spanish crown allow english to setup self governing colonies in North America ?
I doubt the Spanish crown would want English colonies in North America. IOTL, they didn't set up Catalan, Basque and Galician colonies. Britain didn't set up Scottish, Irish and Welsh colonies either. Certain colonies saw greater concentrations of different groups (Scots in New Zealand, Basques in Colombia etc.) I can see a lot of English settlers making a life in the colonies and we might see certain areas, let's say Chile, becoming largely English (but speaking Castillian).
Depending on the popularity of Spanish rule this scenario would probably stifle Dutch independence. OR, Spanish rule could be a flash in the pan, maybe this is a path to an Anglo-Dutch Union when both nations rebel successfully.
The other powers of Europe won't be comfortable with Spain and the Habsburgs being so powerful, obviously.
If Spain successfully retains England (and or the Netherlands) I doubt they'd automatically take all of the places England/Britain did around the world. This would open the door for France, Portugal, the Netherlands, Denmark, and Sweden to seek dominant roles in the colonization of the OTL Thirteen colonies, India and Oceania.
As with any scenario in which a large European country is conquered by another, it would be difficult to make it last. Not impossible, but any timeline featuring lasting Spanish rule would need to justify it with the right carrots and sticks at the right times.
Were it to last, the effects on religion and language would be pretty interesting. Castillian would almost certainly become a Lingua Franca. Vernacular English may well take on many Spanish words. Existing French/Latin words in English might shift to more Castillian forms. Obviously, this probably leads to resurgent Catholicism in England. However, the confirmed protestants in England would only be more set on rebellion.
However, it's not clear that the Armada intended to annex England. I think it's more likely they'd have put a Catholic on the throne (probably a Habsburg) and forced England to stay out of the Netherlands and the Carribean.