Which country was the richest and most powerful in the 16th century and why?

Answer 1

The answer for Europe is clearly Spain. Charles V was the ruler of Spain (as Charles the 1st 1516-1556) and also Holy Roman Emperor which meant he controlled Spain, the Netherlands, and to some extent the German/Austrian principalities in central Europe. He also controlled much of present day Italy. Only France and Britain were left to offer relatively weak opposition.
Charles was a Habsburg, and family marriages had gained him all this territory including access to the wealth and manpower they contained. As ruler of Spain after the discovery and exploitation of treasure from the New World,
Charles had a flow of cash in the form of mostly silver but some gold and emeralds stolen from the Aztecs in Mexico
and the Incas in Peru.
The Ottoman empire was still a major world force in the 16th and even the 17th centuries, but that was not one country.
China had withdrawn into herself at that time and was not projecting power. Only the Spanish had the large fleet of ocean going warships to control the seas and exploit other continents at will in the 1500s - though English "Sea Dogs" like Drake would certainly harass the Spanish by the latter part of the century. Yes, the English prevented invasion of their country in 1588, but Spain was still 'top dog' for the century. The Dutch and English would take over in the next century as maritme powers.
Always remember the "Golden Rule" - "He who hath the Gold - makes the rules." And Spain had the cash to pay for ships, cannons, and mercenary soldiers galore.

Answer 2

England cause of his fleet