To clarify the question about whether there were Catholic German states, the short answer is yes, most definitely.
All of the Holy Roman Empire was Catholic, of course, until the onset of the Reformation. I don't think it necessary to recount all of the conflicts, both theological and political, but by 1555, the Peace of Augsburg was agreed to within the HRE, establishing the principle of "cuius regio, euis religio", in which the ruling prince determined the religion to be practiced in his territory.
The Peace of Westphalia at end of the Thirty Years' War in 1648 confirmed this principle, and its effect remained, right up to the foundation of the Second Reich, and even in the current tax code of the Federal Republic.
At the time, Protestantism was centered mostly in the northern states-Luther worked in Saxony-except for the Swiss cantons that embraced the new faith. The result of the wars soldified this, so that the southern German states-the duchies of Bavaria, Baden, Wuerttemberg-and the Rheinland, esp. the Palatinate, and the bishoprics like Cologne, remained Catholic, while the northern and northeastern states were Protestant, like Saxony and Brandenburg.
The Hessian princes adopted different Protestant faiths (Lutheran and Calvinist) in the 16th century.
A clarification on the Pragmatic Sanction-that actually had nothing to do with the religious question, but rather, in this case, refers to the edict of 1713 by Emperor Charles VI to regulate the succession. Previously, the law in the Empire allowed only male succession (remember the reference to Salic law in Henry V?). Charles had no sons, and wanted to guarantee the smooth succession to his daughter, Maria Theresia. The edict was generally accepted when announced, and Charles was able to secure the agreement of the other states in Europe, but when he died, several states reneged, both within the Empire and outside (eg, Prussia), leading to the War of Austrian Succession.
Prost!
Brad