Limitless money might be a bit of an exaggeration, nik, but I agree that conversions, even in a big colonial empire, shouldn't be much of a problem. In the case of german, scandivanvian or brittish culture nations, the conversion process tends to be quick with lots of natural spread. Iberian and Italian tends to be a little more tricky. Still, Colonial rebels -- particularists, heretics or peasants -- are often small and easy t put down. One should, of course, have forts in all but the most recent colonies to reach city size. The cost of a fort is only the cost of 2.2 colonist in most cases.
In any case, I believe that the choice between catholic/protestant/reformed has to do with the individual benefits, rather on how to deal with the reformation itself. Five or even ten years of slight inconvenience is a almost nothing on a 400 year time-frame.