> What would have to change for you to consider it a country?
Almost as many things as what you'd have to change to consider the UN a country.
> It has a government
No it doesn't. The Commission isn't a government, it has no autonomy from the member states as it takes it's orientations directly from the European Council, which is the meeting of the heads of all member states.
> there has been talk of a European Army
There has been talk about fusion power for decades as well, we know it's not happening anytime soon (creating a European army would require all 27 member states to enact a new treaty replacing the current ones, this hasn't been done since they were 15 and the adoption of the previous one was very chaotic and left deep scares). Also, it's very unlikely to happen since there are too much diverging interests (the Baltic and former eastern states being too reliant on US security guarantees, France being too attached to its strategic independence and Hungary being straight up aligned on Moscow).
> It has a sovereign currency
No it doesn't… There is a common currency between some of the member states, but not all of them.
> If it is the squabbling between constituent states: hello from Canada!
Since you are from the other side of the Atlantic I don't blame you for not understanding this well (as I said, most European don't), but the EU really is as close to international organization like the UN as it is from Federal countries.
It has some federal components (like the fact that their is a legislative process to enact laws that are immediately applicable in member states without ratification) but it lacks a good part of it: no army as said above, but also no justice system, more importantly no autonomous budget (the budget is mostly decided by the European Council, the Parliament having pretty much no weight in the process) no ability to raise taxes (with the exception of tariffs, all of Europe's revenue is made of member states contributions, and even tariffs are raised by member states administration on behalf of the EU which doesn't have it's own capabilities). More strikingly it doesn't have a territory of its own: its territory is made of the territory of member states and they can unilaterally change it without the EU having a say on the matter. Two example:
- had Scotland gained its independence through referendum a decade ago, it would have automatically left the EU because it's not the territory or the people that belongs to the EU but the member states (Scotland could have re-joined later as a new member state, but there's no process for splitting a member state without one part leaving the EU, like the UN, see China).
- France has territories that aren't part of the EU, but it can unilaterally change their status to make them part of it (and did for Mayotte 15 years ago) or the other way around, and the EU has no say in the matter.
All that to say that EU isn't a country, it's a “unidentified political object” (this is a quote from former head of the European Commission Jacques Delors).