Another Spaniard here, for the record.

I wouldn't say it's like Palestine, there are relevant differences between both cases. The basis of the Palestinian conflict and the reason why two states were created were mostly religious and ethnic. I don't think any of that plays a significant role in the Saharan case and it's all down to Moroccan expansionism and access to oil reserves in the Saharan sea.
In the Palestinian case, it was a former British colony that was being decolonized and tensions between two communities living in that territory led to the current situation. I'm not going into the details because it would be too long, you can just go to Wikipedia.
In the Saharan case, it was a Spanish former colony which, in the process of being decolonized, was invaded by a neighbouring country for political and economic reasons.

You are basically saying Western Sahara ended up in this situation because Spain abandoned it unattending the UN's mandate to decolonize it.
Spain was indeed attending the UN's mandate to decolonize it as it did with Equatorial Guinea a few years before, which is an independent country nowadays. But both Mauritania and Morocco had aspirations on Western Sahara and wouldn't accept an independent Sahara, so taking advantage of one moment of political weakness in Spain with the dictator retired to die, Morocco invaded Western Sahara and mainland Spain was more concerned about their internal issues and was not in the position to defend the Sahara against Moroccan invasion.

Mauritania eventually gave up on their aspirations on Sahara and that's how we ended up in the current situation with a Morocco-occupied Sahara with a self-proclaimed government that fights back against the occupation with very little support (other than Algeria) because Morocco has much stronger diplomatic ties.

The current situation, de jure, is that Western Sahara is a Spanish former colony in the process of being decolonized.
But de facto, it's a territory governed by Morocco and disputed with the Polisario Front, which was already fighting against Spanish occupation before Moroccan one and has declared an independent Republic which has very little recognition.
De jure, Spain would be continuing the decolonization process, but that's not realistic when the territory has been occupied by Morocco for half a century.

It's true, however, that this is not an issue that raises a lot of interest currently in Spain for anything else than playing internal politics.
Also, Morocco and Spain have a lot of common interests so Spain is very careful to not upset Morocco with this topic. On the other hand, Algeria is the biggest supporter of the Polisarian cause and another Spanish strategic ally and probably the reason why Spain hasn't fully abandoned yet the Saharan cause. So Spain usually tries to play a low profile on this trying to balance their position between not upsetting Morocco and not upsetting Algeria.

For more details, Wikipedia is still your friend: https://en.wikipedia.org/wiki/Green_March

And the former Spanish king being a CIA agent? Yeah, I don't think it's even worth to add any comment to that.

And, of course, when I say "Spain", "Morocco", "Algeria", etc., I am referring to the regime that ruled the country at that moment.
I'm not trying to imply that every Moroccan or Algerian is responsible for what their rulers do the same way that a lot of Spaniards were not Franco supporters by that time.