People speaking English in tourist areas is normal, but I’ve seen Muricas complain about people speaking Spanish first or even among themselves here in Spain.

Also, no, the machine asking you USD or EUR is because your card is in USD and you can choose whether to have the bank in Spain do the conversion or let your bank do it. If you tried to give a dollar bill in that same establishment you would be informed that they don’t take dollars, or be charged an absurd conversion rate to justify his bother of having to exchange that money.