Why did Hitler decided to occupy Vichy France in 42 then?
Because of Operation: Torch. Rommel's defeat in Egypt forced him to fall all the way back to Tunisia at almost the same time as the Americans landed in Algeria and Morocco. With only Tunisia and a strip of Western Algeria still under Axis control in Africa there was a very serious threat of an Allied invasion of Southern France. Considering the fact that resistance to the Americans was very inconsistent in North Africa, the Germans felt, correctly, that they needed to take command of the defences in Southern France themselves. This was doubly important since the Nazis knew of FDR's correspondence with Petain, and Petain's third-in-command, Admiral Darlan, switched camps to the Allies when the Americans took Algiers (Darlan was assassinated in short order by the Gaullists in Algiers, in an operation that De Gaulle never admitted to being behind, but likely was aware of through his staff in French Equatorial Africa. Eboue allegedly abandoned his policy of temperance to get quite hammered when he heard of Darlan's death) meaning that Petain's loyalties were in question.
I remember during the pre-World War I period, de Castelnau was skipped over for a lot of promotions in the French General Staff because he was a conservative and devout Catholic. Was there just a resurgence of conservatism after the war, or was Castlenau an aberration?
There was a definite resurgence in conservatism amongst the army leadership after WWI, though oddly enough this was in contrast to the liberalism prevalent among the lower ranks. De Gaulle, as you know, was himself highly authoritarian, not much less so than Petain. He also happened to be a democrat though, unlike a lot of the General Staff, many of whom - including Weygand - thought seriously about a Bourbon Restoration. A few individuals even toyed with the Bonapartes instead of a continuation of the Third Republic, and this is
before the outbreak of WWII. This conservatism was likely a reaction to the increase in the political and military threat of socialism after WWI.
Castlenau was an aberration in the more liberal pre-WWI period, but he was not much worse than the norm afterwards. Of the members of the Vichy Cabinet, only Laval was really far outside of the typical conservative of the time, and even Darlan found him contemptible. He was only allowed in the inner circle by Petain for two reasons; he needed him for his excellent relations with the Germans, and he didn't constitute a threat to Petain, unlike Weygand and Darlan, both of whom were possible successors. Laval would likely have been lynched if he'd tried to oust Petain, he was that hated.
It's because he needed German troops on the southern border of France in case an invasion came from North Africa, since the Allies had reasonably secured Algeria and Morocco after Operation Torch (which started on November 8, 1942, three days before German troops moved into Vichy). This actually happened, too; in August, 1944, Operation Dragoon landed two armies in southern France, though it's less well-known than Overlord because it happened a bit later.
It was also only as successful as it was because of the massive infiltration of Vichy by the late Jean Moulin's resistance contacts by that point. I won't even go into what the Gestapo did to Moulin to make him talk when he was captured - it was that gruesome - but he still didn't give them half of what he knew, and the members of the French Resistance who'd infiltrated Vichy's bureaucracy - which the Germans had to keep in place even after they occupied Southern France - were invaluable to Dragoon. Then there was the assistance of the Unione Corse (French Mafia), which was rabidly Gaullist for some reason I've never really understood.
Random question: was the Battle of Madagascar the only operation in World War II where the Japanese co-operated (with a substantial military force) with the western Axis powers?
While there were U-boat supply runs and a few minor details of that nature, as GoodGame stated above, the Battle of Madagascar was the only case of large-scale military cooperation between Japan and the Western Axis powers. There was a plan by some Japanese militants to invade India in force, push through Iran and into the Caucasus to link up with the Germans, but the army predictably balked. This was offered as an alternative to the IJN's plan to invade Australia, and prompted some of the IJA to threaten mutiny if either plan were adopted.
