Spain and England had approximately similar levels of real GDP/capita for most of the 16th century, though there is variation year to year. (The Spanish data is from Carlos Alvarez-Nogal and Leandro Prados (2013), and the UK data is from Broadberry et al. (2015), both available in time series at the Maddison Project.) The usual strong caveats apply about taking variation in heavily estimated data too seriously, but by the standards of historical GDP reconstructions, these are quite recent and of high quality.

What constitutes a "backwater" is perhaps more of a cultural, military or diplomatic question than an economic one, but no, it is not at all clear that (say) 1500-1620 Spain was notably richer than England, nor the other way around.

However, this is a turning point for both countries. The English economy transforms rapidly across the 17th century, especially in terms of occupational structure, marking a shift into industry and services and out of agriculture. This is plausibly the beginning of the transformation of the UK into the world's first instance of modern economic growth, though this is still in its infancy at this stage. But by 1700, UK incomes were over 50% higher than they were in 1600. Spain, by contrast, is at the high water mark of its relative incomes, and declines in both absolute and relative terms for over two centuries afterwards. Spain would not again see incomes as high as the 16th century golden age until the mid-19th century.

Another thing to consider is the extent to which these modern nation-states are the correct units at all. The Habsburg monarchs ruled Spain, but also much of Italy and the Low Countries, both of which were among the richest areas in the world. How exactly we count that, especially during the Eighty Years' War, is not clear, and more a question of definitions than of economics. Spanish prominence in these conflicts was clearly one of the reasons for thinking of Spain as somehow central, and England as somehow less relevant. The Habsburgs threw around very large armies funded by debt based on an enormous tax base, not just in Spain but also from colonies in the Americas, the Philippines, and their holdings elsewhere in Europe. But this is a ruler-centric view, not an economy-wide view. Countries did not produce more goods and services per person just because Phillip II fielded powerful armies.

In terms of how rich these states were compared to modern ones, the vast majority of people in both countries were very poor. Comparing across countries and times is tricky, and we need to take all of this with a grain for salt. But insofar as we trust GDP reconstructions, overall GDP/capita would be lower than almost everywhere in the modern world, excepting only Sub-Saharan Africa. Incomes in both the UK and Spain are twenty times what they would have been back then. Laos in 2002 would have had higher incomes than either country in the 16th century. The Democratic Republic of the Congo is a different story, and would have been less than 1/3 of the income of either Spain or England - this is one of the poorest countries ever to exist, barely above subsistence for the vast majority. But in general, we should think of both places as very poor by modern standards.