Queen Elisabeth had in mind one of the princesses of Italy. But Leopold wasn't attracted to any of them. The choice at that point was limited as well: not a lot of Catholic royal families left or there were no single girls anymore... She also didn't want her son to marry someone they had close family bonds with and German royal families were out of the question so shortly after the war. So they went up north to the Scandinavian countries. Leopold met Astrid and the rest is history...
The arrangement that was made between the Belgian and Swedish royal house was that Astrid promised to raise any future children as Catholics and that she would convert if she felt ready for it. After Princess Joséphine-Charlotte was born in 1926 and started to ask her mother about baby Jesus and she couldn't answer her questions and mainly the fact that her daughter said her evening prayer with her nanny made her realise that it felt wrong to belong to another church than the one her husband and child belonged. So she asked Leopold for an instructor in the Catholic faith and converted in August 1930.