Are you sure Iberia didn't offer Business? It is very easy to pick the wrong cabins on Iberia Plus, you have to select the correct cabin "radio button" for each flight.
Anyway - with 65 minutes I wouldn't lose sleep over it, you won't have time for anything more than a quick drink in the lounge.
As there was no Club Europe on domestics last year, an onward flight in Club Europe sufficed for lounge access. As far as I know BA and Iberia have the same availability, for BA flights at least (as a Blue) so that should not have been an issue.
Yes, you are granted the highest baggage allowance on your booking for all BA flights.
Curious as to why you redeemed via Iberia Plus as I'd presume the taxes (well, RFS) would have been cheaper via BA, at £42.50 for CE+ET or £50 for CE+CE.