Actually, not only Spaniards can be Caucasian. I am Cuban and have Spaniard grandfathers,and most people, including other Hispanics, are surprised to learn that I’m Cuban. (My eyes are green, skin is fair.) My Argentine friend is even fairer!
But, in terms of ‘are Spaniards Hispanic’? (Not referencing physical characteristics). Spaniards do not consider themselves Hispanic. They are European, just as Italians and the French are.
Americans call Spaniards hispanic. My mother is 100% Castillian and has never marked ‘yes’ to being Hispanic on any form. This has been a life long discussion. My son asked me this question as he was filling out an application. I said you are Caucasian, not Hispanic. Not a pride thing. It’s geography v My nephew decided to mark the Hispanic box to help him get into a college because his grades were an issue. I don’t believe in doing that. It should always be merit based.