How to get a colonial nation to trigger?
Solution 1:
If anyone else is having this problem, you just need to core 5 provinces, or the amount of provinces you need to have 5 in that place. You dont need 5 to colonize, you need 5 cores to make a colonial nation. Of course, colonize give you free cores.
Solution 2:
I also asked this question on the Paradox Forums, where Heliocon and londoner247 were kind enough to answer.
In the words of londoner247:
Once you have five cored provinces in a Colonial Region then all the provinces you control in that region will switch to your new Colonial Nation and they will get cores on all of them. So, in your situation, if you can handle the overextension and there are five spare provinces in the Colonial Region (assuming you have no colonies there already) then your best bet is to build five colonies and let it all switch at that stage.
If you conquer territory in a Colonial Region where you already have a Colonial Nation then each province you take will immediately switch but without a core so your Colonial Nation may get overextension issues and you may need to keep an eye on it to help with the rebel stomping.