Maybe we should have a separate history forum here...
Yes, Prussia has often had ties with The Netherlands.
As for Holland vs Netherlands... It's a common error and even one that I make myself.
The Netherlands was founded (created) in 1573. Prior to that the area now known as The Netherlands, Belgium and Luxembourg was a mix of 17 separate semi-independent nations. Some had loyalties to the French kings, others to the German emperors. In the early 1500s they all came under control of Charles V of Spain. When the protestant movements took hold, the 7 northern nations allied under the Prince of Orange and started their struggle against Spain. Of those 7 nations, "Holland" was the largest and most powerful. Even though it was the "Republic of 7 United Netherlands", Holland was calling the shots most of the time. During the French occupation (1792-1813) it was split in 2 separate departments and this split has since then remained. The northwestern part of the country, with cities such as Rotterdam, Dordrecht, The Hague, Delft, Amsterdam and Leiden was all Holland. Including my little village, even though it's now part of Noord Brabant, which was one of the conquered territories (i.e. not one of the 7 original nations, but taken from the Spanish later).
Phew...
So anyway, saying "Holland" when you mean The Netherlands is in fact wrong. Like saying America when you mean the US or saying England when you mean the UK. However, most people will know what you mean.
Finally... I don't think it's an insult...