Seems to me that placing someone under your SoI is basically saying "I'll annex you in a bit, just need to tie up a few loose ends at home". Just like in reality.
Not to me; more like "I don't plan to annex you, but nobody else can either." The Monroe Doctrine seems like an excellent historical example to me of the USA declaring that Latin America is in their Sphere of Influence.
Some questions:
1. Is it a fixed 20 prestige for all declarations, or does it vary depending on the size of the target country? Or, for example, should it cost an extra 10 prestige to declare a SoI over a country of a different religion?
2. Does a sphere of influence apply across the board, to every country including your own allies? So if, for example, France and Spain were allied and both declared Portugal in their Sphere of Influence, does that mean that if Spain then invited Portugal into an alliance France would get a casus belli against them?
3. I assume the casus belli from breaking a sphere of influence lasts for one year, the same as other action-related CBs?
4. Is there any prestige or relations penalty if your SoI is breached but you choose not to declare war on the perpetrator? ("Aragon is mine and nobody else can attack them!... er, except for you, Mr Huge Blobbly France. You go right ahead while I, er, look the other way...) Do you keep the SoI or is it lost?
5. Can you choose to revoke a sphere of influence yourself? Especially if, as above, there's a penalty for not responding to a violation.