I was surprised when the islands east of spain where not included in the game.

I think there were two reasons behind not including them in MTW.

First, while important, they were not as large a part of history as Rhodes. If I recall Rhodes and Malta both played roles in the crusades at one point or another. They were also part of the Catholic/Orthodox/Muslim struggles.

If I recall correctly weren't the western medditeranean islands held by muslim forces and not seriously contested by spain till after the game timeframe?

Second, the map gets pretty confusing as it is. When MTW came out there were lots of threads wondering why they could not invade malta or rhodes. Not realizing that their blown-up pictures were linked to a smaller plot in a different sea.

Just to help lower the confusion they probably removed those islands. The Baleric Islands?