Since it is a different architectural style does not appear to have any of the typical elements of the Spanish/Mediterranean style, unfortunately I don't think cosmetic changes can take it close to that style.

Plan to gut it, smooth stucco the exterior, and change the door to french doors. The house will be a future pool house/ mother-in-laws. We know we have to throw a bunch of money at it :)

There you go then. You really have a blank slate don't you. I love a small house . The french doors are a great idea. Is it possible to remove or move the fence as well? If you could at least move it even with corner it would give you a much better canvas. Stucco will read much more Med, however the shape is never going to be a true Spanish house. You can add elements that give it a flavor and make it more fun than a box. Do you plan to replace the windows as well. If so you might consider making the small one on the first level larger. Having a patio or deck coming out from the french doors would make good sense too. Painting the stucco a warm terracotta color would go a long way toward your goal as well. So would a pergola style awning over the patio.

"Throwing money at it" is ill advised. Don't fight the modern profile, contemporary windows and shed roof. Work with those features and add value to your home, or it's likely it will end up Frankenhouse or worse.

YES you can. You will have to hire a roofer but you won't have to change the roof itself.
I would build a wall about 2 feet high maybe a little less directly above the front wall then create a sloping roof from that down to the existing front of the roof ( your roofer will need to waterproof around the base of the wall before the new slope gets installed then waterproof the new sloped roof as well) then use the spanish style roofing tiles on that. This is quite common in the historic gold country in California.
Add a 4- 6 inch deep skirt below the siding wrapping around the sides at least 4 feet also sloping that as well. You can use cedar shingles for more of a Spanish look or stick with clay roofing tiles for the Mediterranean look. You will need to have some small triangular supports made up ,slightly decorative, about every 4 feet is what I would do. Add 4 inch trim around the upper windows 2 inch trim around the lower windows and door and yes get rid of the security door! if you think the security door is necessary there are many more decorative options out there.
Many options for paint but here are 2
Mediterranean, go with a slight pink tone in an Adobe brown with a tan trim color.
Spanish, Adobe brown on the cinder block a warm white on the trim (Swiss coffee from Kelly More would work) and a lighter adobe color on the wood siding or you could even go with a slightly pastel earth tone orange or a pastel yellow on the wood siding
You can definitely change this place to your liking.
Last thing instead of trying to hide the cinder block use a matching darker wash to make the joints pop a bit and enhance the texture of the blocks.

Some inspiration.

I thought the roof on the top one most resembled your, the color on the second or first might appeal to you also the front of the second gives me pause . So does the front of the third although it is not strictly Spanish style.

Well now that you mentioned stuccoing the place Mediterranean is easy to accomplish

; p

The cinder block will be taken care of by the stucco. A shed roof isn't by definition modern and contemporary they have been in use for centuries. I agree with some of what Bliss is saying. The roof would look very good with tile on it. I don't however think it would take a total rebuild . You need to consult an architect before making major structural changes. Adobe brown is in face a South American color not a Spanish color but I digress. The orange and yellow colors are more to the Spanish theme. This house could be made into something spectacular without a massive investment. I wish you luck , I'll be following your progress please keep us updated.

Well it seems that the intention here is to morph this building into something "Spanish-y". Before you go installing that Spanish tile on the roof however know this: roofs need to be engineered to support the extra weight of the tile. This rather utilitarian looking little building looks as if it has 2x6 rafters at best. So budget in an entire new roof while you are at it. Good luck.

You might consider a terra-cotta tile trim on the most visible roof areas. Also, the South American 'Spanish' style included quite a bit of galvanized roofing materials. The other Spanish elements can be easily created embellishments. Iron window and balcony details, tile details, paint, stucco, window awnings, etc. Spanish is truly open to interpretation.

Rusty you are right which is why I said they should have an architect involved. It's the rather utilitarian look they want to remove isn't it? As Green project suggested I was thinking about this last night. I wondered if you could make the roof flat. Install a roof patio and and your Spanish elements to the front of the building. In front of the house a paver patio would add to the look.

Some inspiration...

Shutters plus an entry cover in tile, although this is more island style

Pretty color and some details you could add for Spanish flair

More details - arches very prominent for Spanish style

A short faux roof on the front, plus arch at entry

Love those deco. I had a thought on the tile. They make a none tile roofing material that is recycled now. Lighter, just as sturdy and easier to use. There are some that are solar units as well.

Cool - can you post a link to those products?

I can't. One I don't know how. And two I'm not sure how to find them. I watch a lot of home building shows. I'd look up solar roofing shingles /tile. Sorry.

I have seen them in use in the Colorado area however. They used them a lot in mountain towns.

I found the one of the makers. Verde industries makes Spanish tile of aluminum. They are lightweight and long wearing as well as recycled but not solar.

The picture above are call Photo-volcanic ( 50% chance I spelled that wrong) they have solar cells in them. Several companies make these.

GTB you posted that well! I'm saving that!

I wanted to make a (weak) joke about "photo-volcanic," but the spellchecker changed it to "photo-colonic."

Lizzie I don't want to know what a photo colonic is thank you.

Photovoltaic?

Thank you flopsycat1 I believe you are right.

Ok, pardon me, but I couldn't resist....photo colonic:

:

Well now that's interesting . Not sure how that will work for a roof necessarily, but interesting.

GTB- I promise I won't do that again

And, jS, I like the modern/minimalist look of your little guest house. I'd take the bars off the door, paint the door a bright color, and invite the guests.

Please do, Flopsy, more humour!