I am by no means an expert in Latin American dance, in comparison with some members of the forum, but Spanish culture/history is a strong point of mine!
The Paso Doble was indeed orginally a Spanish "two step" marching dance which is still danced to this day in Spain, especially at weddings and other family gatherings. It was developed in France, I believe in the 1930s, (hence the names of steps/figures being in French) and elements of the bullfight were incorporated, eventually leading to the dance we know as the Paso Doble today. Flamenco dancing is closely associated with bull fighting and elements of Flamenco can be seen in the Paso.
Incidentally, the "stamping" of the foot known as the appel, is not flamenco, but derives from the way in which a bull fighter attracts the attention of the bull.
It is interesting to watch a bull fight (albeit a short clip!) to see how the dance reflects the bullfight.