Not really. As you yourself just stated, there are thousands and thousands of native allies to take into account. The fact that a single Spanish unit can easily wipe out the New World nations without much danger and with no Native aid is obviously not the ideal representation.
I don't think you and I are arguing the same thing. Let me put my point another way. The Spanish should have a reasonable chance to take down the largest Amercian empires while only commiting hundreds of their own soldiers. There are many options for different mechanics to get to that point, but which abstraction you use isn't the main point. The main point is that committing trivial numbers of men should give good success ratios for the Spanish, or the game balance is wrong. In EU3 the game balance was off because the Spanish had to commit ahistorically many troops to get any chance of historical results.
Also, you must remember that in the early 16th century it would have been next to impossible for Spain to dump loads of troops into the New World. At that point the Spanish empire consisted mostly of fledgling colonial outposts, not full grown colonies. On top of that, the Spanish did send several failed expeditions into Native lands. When they were beaten back, they did not immediately return in greater numbers. Instead they often went back to their colonies for a few years to regroup and perhaps seek better leadership.
It may indeed take a year (or 5) before they return - just like what the British did in their French/Indian wars. News has to travel back to Madrid, an decision needs to be made, and then something done about it. None of that was fast in the 1500s, but on the other hand that doesn't give enough time for disease to become a non-issue, or even for much raising of captured horses.