The answer to your question is neither simple nor universal, as each region has its own confessionalization story. It is not at all random that certain areas remained Catholic and others converted, these differences, as you noted, can be observed through confessional fault-lines that are still visible today and had to do with political and religious leadership. There were some typical paths of conversion, as identified by Heinz Schilling in his “The Reformation in the Hanseatic Cities”, yet there were many unique circumstances that directed differing outcomes throughout Europe. The authority of the Vatican was not really the driving motivator, as the motivators were often financial and political rather than religious.

As for the common people, mostly they simply did not have a choice, or it was a difficult or impractical one. After the establishment of Cuius regio, eius religio, subjects who did not wish to conform were free to officially emigrate, yet as you can well imagine, this would often be impractical if not sometimes impossible. Additionally, there was a surprising amount of tolerance for religious plurality, simply out of expediency and convenience, which was more often ‘looking the other way’ than active acceptance. That being said, there were also a number of examples of officially recognized bi-confessional communities, (for further information on this see Benjamin Kaplan’s Divided by Faith Religious Conflict and the Practice of Toleration in Early Modern Europe).

If I may also provide a somewhat long, yet interesting example of confessionalization of the populace through both convenience and force, consider the city of Münster in NW Germany. The bishopric of Münster holds a historically significant position as the northernmost stronghold of Roman Catholicism in Germany. Its neighbours, consisting of the Calvinist United Provinces to the west, the largely Lutheran lands of the Duchy of Cleeve-Mark-Berg to the southwest, the Calvinist Hesse-Kassel and the Lutheran Hesse-Darmstadt to the southeast, the Lutheran (later Calvinist) County of Lippe to the east, Lutheran Osnabrück and Calvinist Bremen to the northeast, meant that by the seventeenth century, Münster was almost completely surrounded by Protestant territories (see Ronnie Po-chia Hsia, Society and Religion in Münster 1535-1618).

What makes Münster particularly interesting for this question is that it was part of a bishopric held by an elected prince-bishop (not elected by the city) who enjoyed both secular and religious power over the region, that began a conversion to Protestantism which made a swift detour to Anabaptism, then was forcefully brought back into the Catholic fold where it remains, more or less, still today. The initial conversion to Protestantism reflected both a religious reform movement but was also very much a secular and political movement within the city itself. It involved not only the burghers but also some of the city council and the guilds. One of the reasons for this widespread involvement is that traditionally the city council and the city fathers in Münster were drawn primarily from a small group of elite citizens, almost all of whom were staunchly Catholic. The guilds, on the other hand, the tradesmen, merchants and magistrates, consisting of the majority of the citizens, were more open to reform ideas, many holding Lutheran beliefs. After a brief bit of violence, an agreement was signed outlining that the prince-bishop was to be recognized as the secular authority, but that he would allow the citizens to choose their religious affiliation (for further information see James Stayer’s The German Peasants' War and Anabaptist Community of Goods). Schilling, as mentioned above, outlined that the beginnings of the Reformation in Münster followed a familiar path of guild and burgher participation in organizing uprisings against the conservative magistrates. Yet, what differed in Münster was the flood of Anabaptists from the low countries brought there by a call from a perceived prophet who declared that Münster was to be the site of a new ‘Kingdom of Zion’ resulting in an unusually violent and bloody 16 month ordeal (about which much scholarship has been done, the above-mentioned Stayer is a good starting point). The final outcome was the storming of the city by the prince-bishop’s forces which included support from other regional rulers Catholic and Protestant alike. This uneasy unity of the faiths for a military expedition highlighted the distrust of the ‘unofficial faiths’ such as Anabaptism, as well as the value of public peace and status quo,(for further information see Donald Ziegler, Great Debates of the Reformation). Ultimately, Catholicism was officially re-instated as the faith of the region while the other faiths were banned (at least temporarily). As pointed out by Hsia, in Society and Religion in Münster 1535-1618, though there was no evidence of an open Lutheran community in Münster, it is known that there were clandestine meetings of Lutherans and they were not explicitly barred from obtaining citizenship. Legal recognition of Catholicism, Lutheranism and Calvinism did not actually come until 1648 with the signing of the Treaty of Westphalia, which incidentally was in part decided and signed in Münster.