There was never a “sizable” protestant minority in Spain. As for the nature of the Spanish Inquisition and its relationship to the Jews of Spain go check out Henry Kamen's The Spanish Inquisition. The author is Jewish and is one of the new bread of Inquisition historians who does not rely solely on contemporary English and Dutch anti-Spanish political propaganda.
It is also unremarked that many Jews in Spain converted of their own free will under the leadership of a series of Jewish Scholars wo came to accept Christ. Many important Spanish bishops, archbishops, abbots, and priests, oddly enough, were Jewish Converts! This tradition continued, for example, when a Jew was named the recent RC Archbishop of Paris.
As with any large number of converts to anything, many Jews did convert for less than optimal reasons or under duress, and continued to practice their original religion in secret. This, amigo, was guaranteed big trouble with your neigborhood Inquisitor, if you were ratted out. A one-way ticket for you and the family to old Mexico was a solution immensely preferable to the punishments fashionable at the time. One should add that these gruesome punishments were also practiced by the Protestants upon Catholics or upon Protestants who were the wrong kind in the wrong place at the wrong time, e.g., a Lutheran or a Baptist in Geneva. Theology had teeth in those days!