Final answer:
The demographic collapse of New World populations due to smallpox was not an issue that divided European nations in the 1500s, unlike Spain's wealth and power, military, colonial competition, and religious conflicts.
Step-by-step explanation:
The issue that did not divide the powerful nations of Europe in the 1500s is the demise of New World populations due to smallpox. While the Spanish increase in wealth and power, growing military, competition for colonies, and the religious conflict from the Reformation were sources of contention between European powers, the plight of the New World populations did not serve as a point of division between them. European countries largely disregarded the impact of diseases like smallpox on indigenous populations in pursuit of their own colonial and mercantilist aims.