^ I would really want you to be right, but I just don't see it. Between the ride layout, the poor access to and usable space remaining in Festa Field, and the topography--they'd have a much wider Rhine crossing than even Ponte de San Marco--I think "it's a bridge too far" (no pun intended).
Now you may be right there's more investments planned and a "Spain" (hamlet of Madrid, etc.) on the horizon for Festhaus Park, but I think it would unconnected from this attraction, given the aforementioned challenges and that they are now calling this a Festa expansion. Maybe "Spain" was originally in consideration for Festa Field, but upon seeing the evolution of the ride layout, decided to disassociate Madrid here and rethink using Festhaus Park... (Or maybe Madrid was strictly the internal SEAS project name like someone once said, it's always been meant to be part of Festa, and that Spain would be a great theme for a hamlet was a coincidence--and/or some trolling, since they knew the name would get out there).
My current hope is that it has decent, period-appropriate (please no Tempesto anachronisms!) themeing that has some connection to Marco Polo, Venice, Italy, or somewhere he visited--within reason--I don't think a China theme works in a largely European park...but we did have Vikings invading Canada. (And I do care about themeing at BGW, but to your point ^^, if this were e.g. CedarPoint, I wouldn't even care about the track color. Not a dis on CedarPoint, just very different expectations).
Make Festa Great Again!