I'm not very well documented on history, but as far as I know, the Basque country decided to join Spain freely to be defended from Navarra kingdom. Here is where the fueros came from. Since the creation of Spain in XVIth, the Basque country has always been in Spain.
The nacionalism beguins in the XIX when nacionalisms are on fashion in Europe, and comes from Carlism (when the basques supported the brother of Fernando VII Carlos instead of his daughter Isabel II).
I think a basque is as different from a castellano as can be an andaluz or an aragones... how different is an alavés or a navarro from a Riojano? An a riojano from a soriano?... I think frontiers between regions inside Spain are not so well defined, for example inside Madrid, towns from the sierra look more like segovianos while towns from the south look more like manchegos.
Anyway I think there isn't an easy solution, as we have seen from the last basque elections, a little bit more than half of the population is nacionalist (pacific), an almost half is not nacionalist, so if you give independence to Basque country you are not respecting the rights of this high minority.
Anyway, going back to ETA, the most damaged are the own basques, and they fight again the basques who think different..