It's should not so much be a question game versions.
If a state possesses more than one province (apparently Portugal not only had lisboa, but also madeira), you can indeed not request the annexation of the vassal capital -- like you cannot demand the English capital of London without first conquering the remaining territories. You must either first conquer madeira and then demand OPM (one-province-minor) Portugal/(Lisboa), or demand it's release and later conquer it -- given that it's war score value is low enough.
In order to take capital provinces -- even if you have a specific CB on the province -- you must either annex the state whole-sale, or first "isolate the capital." This later approach means that a capital province must be fully isolated from the remaining provinces. If the capital is coastal, no other coastal province must exist connected to it by sea, though one can exist in the hinterland of the continent.
As for the part about "...do not show the production till the colony becomes larger" :
Presumably, you are referring to trade goods, the production item displayed in the lower left corner in the provincial menu. Indeed, when a colony is established, the colonial trade good will be unknown -- a "question mark" -- and will only show, or be discovered, some time after the colony's foundation (more likely close to becoming a city at pop 1000). The important difference between IN and previous expansions is that colonial trade goods are no longer fixed. Upon colonising a province, the trade good will be unknown and what it is that will eventually be discovered will be semi-random. Madeira, for example, may yield four different types of trade goods: "fish, naval supplies, sugar." Obviously, sugar is more precious than fish, but you can't control the outcome. Trade goods affect the production value below "tax income," with some trade goods like suger being more valuable. They are the primary source of revenue you'll get from colonies which often have poor base tax.
Here is a list of trade goods:
http://www.paradoxian.org/eu3wiki/Trade_goods
As for where to colonize, I'd suggest you check this list of regions associated with different trade goods:
http://www.paradoxian.org/eu3wiki/Regions_and_Colonial_Trade_Goods
You'll see that certain regions can only reveal "grain or slaves," which isn't especially valuable, at least not early on. A good approach is hence to look over which regions give a chance of good trade goods (potentially off-set by good or bad base tax in the province). The Caribbean isles are some of the best, since they can only reveal "coffee, cotton, sugar or tobacco," all excellent trade goods. The Spanish Main, lying deceptively between three comparatively good colonial trade good regions, is not only abysmal when it comes to base tax, it also reveal terrible trade goods in 2/3 of all cases, namely: "wool,(bad) fur (really bad after the early game) or coffee (great)."