Well if I understand you correctly you are playing as spain. And so your key mistake (as you have already mentioned) was your use of HEAVY cavalry. I play as Portugal (nearly identical) and I do very very well with pike and musket armies (although I use the Portugese arquebusier and not the musketeer). Although it may not be historically correct I use Jinetes for my cavalry (fully upgraded in armor they are a good medium cavalry). They are faster than my knights and so alot more useful. I would have set up my army just as you did (pikemen 3 men deep to maximize my line length and fighting potential of my pikes) arqubuisers up front and dismounted portugese knights to protect the flanks. Sometimes I will have cannons in the army and if I do I will disperse them amongst the arquebuisers (napoleonic style). Once the enemy is too close I would advance all my infantry to cover the cannons instead of pulling the cannons back.
I would leave my cavalry waiting up front and on the flanks (to give room for my gun powder units) to attack the enemy missile troops once they break out from rest of the infantry units to skirmish. Its almost better to lose all the cavalry ensuring that the missile troops are gone then leave them there and save your cavalry. After that its a standard battle. Which my pikes in the center the enemy will always bring their cavalry to the flanks, which means my knights are gonna have to be in DEEP formation to absorb the charge. I normally try and turn my pikes onto the flanks quickly to get rid of the cavalry and the refocus on the center bringing the remaining Jinetes to crush the enemy on my pikes from behind.
If you don't want to use Jinetes you can use the heavy lancers/knights of spain as well. In this case just use them to run the enemy over and over again (as long as you have cavalry superiority). Charge their line pull back, charge again. You'll lose cavalry but you will decimate the enemy. If they have cavalry superiority you have to make a decision. Engage the missile troops when they get far out in front of the infantry and risk an all out cavalry battle (which you may loose). Or wait for the cavalry and infantry to engage (leaving the missile troops in their rear), swing around and destroy them then. Either case you gotta use your cavalry.
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