Do you have a link to this bilateral agreement by chance?Just apply for the citizenship. Nothing to lose. Speaking Spanish is not a requirement anymore. Go tot he court start the process and forget about it check the progress occasionally.
Brazil and Argentina have an agreement where each of their citizens can get permanent residence directly of they more to the other country. MERCOSUR is temporary and for naturalized citizens it kicks in only after 5 years of citizenship. But for Brazil that's not the case as per the bilateral agreement.
Basically what you're saying is that naturalized Argentine citizens can get PR instantly in Brazil and don't need to wait 5 years like other countries within Mercosur after naturalizing?