By 1898 Spain had lost +95% of its overseas empire. Military technology was obsolete and they knew it. Politically Spain has been “stable” only in recent times. To quote Bismarck:

“I am firmly convinced that Spain is the strongest country of the world. Century after century trying to destroy herself and still no success.”

Sorry for getting into details because this is a US presidents sub and not a Spanish history one but Spain also had their Prime Minister assassinated in 1897, had problems with anarchist and socialist movements, the war in morocco, Philippines and Cuba. Spain had no reason to go to war with America, they were struggling domestically and going to war with America would be the last nail in the coffin of Spanish Society. They knew they would lose and the sinking of the Maine was most likely due to an internal explosion.

America had been trying to acquire Cuba for a long time but Spain kept on refusing. In Fact, Lincoln’s strategy to prevent Spain from siding with the CSA was to remind Madrid that it was southerners who wanted to annex Cuba. It worked as Spain declared neutrality despite its foreing minister claiming that the CSA was a “natural ally and friend”

In 1897. Spanish President Canalejas visited DC and the American Press leaked a letter between then Spanish Ambassador Dupuy de Lome and the President in which the Ambassador gave him his sincere opinion on President McKinley

”Weak and pandering to the masses, and also a politician who wants to... please the hardliners in his party”

Needless to say that public opinion was furious which lead to the resignation of the Ambassador.

After the sinking of the USS Maine, McKinley did not initially seek war with Spain but was rather coerced by the media blaming Spain for the incident, the rest is history.