Here's the thing.
With a decent GPA from a top school and a high GMAT (700+) as a military officer, you'll have enough of a shot at H/S/W that they're all worth a serious go. The Achilles' heel for military folks traditionally has been the GPA/GMAT combo -- and in the old days, even that wasn't an issue (as they'd still get into H/S/W -- but that was pre 9/11 when the numbers serving and applying to school were not as much as they are now; still, it's not like there's a deluge of military applicants now, but that there's more than a generation before, and it's a tad more competitive).
In any case, the only thing you really need to focus on are two things (well three):
(1) GMAT. So long as your GMAT is 700+, you'll be perfectly fine. In your case, you can probably even get away with a 670 or 680 and still be fine, since you went to a top school (Cornell) in a rigorous discipline (engineering) and still managed a decent GPA.
(2) Essays and interview. Like you said, it's about showing that you have an appreciation and understanding for what aspects of your military experience is transferrable to the business world, and what aspects are not. On a surface level, this means stripping away the military jargon (which is relatively easy so long as you're aware of it). On a deeper level, its conveying your insight into how *might* a b-school group or a business/corporate environment might have similar and different dynamics compared to the military (and that is a function of the kinds of examples you use in your essays and the "lessons learned" that you are able to talk about). Most if not all US military officers have no formal business experience, so it's not really a concern at all. They just want to know that while certain aspects of your leadership experience are transferrable, others are not (aside from the obvious -- such as combat situations). As you may or may not know, one of the biggest is the sense of service towards something bigger than yourself -- not necessarily patriotism, but more that sense of selflessness, brotherhood and camaraderie of which there is no equal in the corporate world, or civilian world for that matter.
(3) Your recommenders. It's really a matter of steering them in the right direction if they haven't written rec letters for b-school. That it's not necessarily about your valor in combat, as much as again specific aspects of your character and skill set that can be transferrable to the business world (which again means explaining to your recommenders without patronizing them if they are lifers what aspects of military life might be transferrable and what might not be, and having them focus on only the stuff relevant to your life after the military.
As for the ethnicity thing, you have the option of putting either Hispanic or Caucasian. It's really up to you. Chances are, it probably won't make a huge difference either way, since whether you're a Hispanic officer or a Caucasian one won't make a difference - the big one is that you're a military officer, which will put you in a different category so to speak anyhow.