You've got the major issues covered.

If the next day's flights are all full in J, you should be offered the option of flying in PE. This should result in a 75% refund under EC261 rules (that you may have to fight hard for). IB will probably be quite difficult about re-routing you on a different airline in J and might also be difficult about you waiting in MAD for another day or two (for the next J seats).

You will also have your overnight accomodation at MAD covered and you should receive EC261 compensation for arriving much later than scheduled.

However, if you want a more relaxing life, you can pro-actively move your MAD-MEX flight to the next day (if IB will let you) and you can pay your own accomodation near MAD (which isn't typically all that expensive). Especially since arriving to MEX at 4am is hardly a thrill either - and you may have to pay for the prior night in order to have your hotel room ready...