Final answer:
St. Augustine, founded in 1565, is significant for being the oldest European settlement in the U.S. and served as a major Spanish outpost in the Americas for trade, defense, and religious conversion of indigenous peoples.
Step-by-step explanation:
St. Augustine was an important settlement to Spain because it served as a strategic foothold in the Americas, which not only allowed Spain to protect its claims against European rivals but also provided a base for the spread of Catholicism among the indigenous peoples. The settlement, founded in 1565 by Pedro Menéndez de Avilés, became the oldest continuously settled European settlement in the continental United States and had a significant impact due to various factors, such as the construction of the Castillo de San Marcos, a stone fort that defended against attacks, and the establishment of Spanish-American folk dwellings. The stronghold of St. Augustine reflected the Spanish Empire's extension from their Caribbean holdings and was pivotal in their conflict with the English and the French, especially regarding control over the southeast and the lucrative Indian slave trade.