That's not quite how the cap works (or rather has to work). If the Spurs got the cap-space route, they'd have the room exception ($2.8 Million) to offer to a backup point-guard after signing a big free-agent. If Mills were going to be a free agent in 2015 instead of next year, he could slot right into that spot. It's really just bad timing on his part. If he wants to sign a decreasing $6M/2 deal with player option this off-season, then the Spurs may well be able to play that type of cap manipulation in which Mills opts out next June only to get the same contract under a new definition (with another year attached).
As far as the $1 Million goes, it really depends on how that money is spent. I think there are a couple of players in the draft this year who could make fine backups to Parker. I think spending that money on them would be a good investment of a pick. If you mean the Spurs would actually sign a minimum player like a TJ Ford, I can understand your apprehension. Min guards are hit or miss. Note, though, that the Spurs wouldn't actually have to account for this money in their cap space, as minimum contracts can be signed even after cap room is used.
I agree we don't know for sure. Green has another year on his deal, and how he plays in 2014-2015 will have a large bearing on what he gets. If Danny stays where he is now, he's probably looking at something around the MLE. If he becomes more consistent and averages the 12-14 ppg is had post-All-Star break, he could get a bit more. He fades away, he'll probably get a contract similar to what he got in 2012. As far as Diaw is concerned, I could see him doing something similar to what McDyess did, but I don't think he's even thinking about retirement now. I think he'll stay so long as the team wants him to, but I think he'll be getting something in the $6-7M/year range. To each their own, though.
As I mentioned before, Joseph and Mills aren't in the same category, since Cory can be re-signed in 2015 to the room exception without affecting the cap. In general, there are several ways to prevent the backup PG spot from being a weakness. I don't think it's fair to categorize letting one player go as being similar to what Dallas did in 2011. Mills is a nice player, and he's arguably "key" to the Spurs' success. But he's key in the way JJ Barea was, not in the way Tyson Chandler was. Had the Mavs just let Barea go to get another player to put around Dirk and Chandler, I don't think anyone would have been on Dallas' case. In that regard, the Spurs would be letting one player (the eighth man) go to chase a star. That's certainly a gamble worth taking from my vantage point.
I don't think it's clear at all that Aldridge is a Blazer for life. He's been noncommittal as about 2015, and if Portland gets bounced so easily again, I think LA would at least test the market. A team like the Spurs, with a winning tradition, a great roster and being down the highway from his hometown, would probably stand a good chance to land him. If Pop still plans to be around, I think the Spurs may well be favorites to land him or Bosh (whose hometown is up the other interstate). Bosh has been in Miami so long that people forget how good of a player he is. He'd be a huge get for the Spurs, a much better one than Gasol due to his ability to play both front-court positions at a high level on both ends. Love's a wildcard who I think will be this generation's Barkley. If he wants to come to the Spurs, fine, but I wouldn't roll out the red carpet for him.
I've talked about my views on Gasol-to-the-Spurs many times, so I wont' go on and on about it here. I don't think the Spurs should be looking to get a Duncan replacement in 2015. It just won't work. The team is on the precipice of a fourth evolution since 1997. As Parker ages and Leonard ascends, the team will need different things from their players. They won't be able to run as many PnRs as they do now once Parker stops being as big of a scoring threat. They'll need another offensive staple, and Leonard isos won't cut it, nor will his post-ups if their are two bigs in the lane all the time. They'll need both spacing and a third source of offense from a player who can get his own shot. That's why having an elite offensive big who can also shoot from outside will be important if the Spurs keep the rest of their SL the same. The defense isn't going anywhere with the Medium Three on the roster, but the offense will go south if the Spurs continue down their current path.