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Are we starting to see the end of 'political correctness'? With Trump and Sanders doing well in the US election race on the back of outspoken comments, and Europe sinking under Merkel's open door to immigration, are we finally seeing the demise of PC-nonsense and the return of common sense?

No to both.

I'm not sure what political correctness is since the answer changes depending on who you ask.

We are seeing a polarisation of politics. In the US who does the "moderate" vote for if it turns out it's a choice between Sanders and Trump?

Perhaps fear that it might go that way will mean neither gets the nomination in the end.

In a cointry where the vast majority have never left their home state, never mind the US and a deep dislike of the Federal Government in a lot of states it's easy to see why someone like Trump can ramp up fear. The world will be in for misery if he gets elected.

Would they become isolationist? Would they throw their weight about more? Would they cosy up to Russia? Could end up with Europe and the UK being defenceless overnight.

Just how would a power bloc like Europe be defenceless?
Against Russia?
Disadvantaged maybe .....

Oh how I long for the days of an isolationist US.

No way will they cosy up to Russia. The Americans are the most paranoid nation on earth and there is no way they will publicly cosy up to the "Commies" under a Republican President.
A Republican President means further expansion of the American Empire. Probably ground troops in Syria and Libya and possibly expanding the air war to Yemen and probably Lebanon.

Whilst there's plenty of criticism to throw at Obama, one of his praise-worthy actions is in resisting the blood-thirsty foreign policy of the Right in America. Even if the trade-off has been drone strikes.

A Republican President (certainly any of those monstrosities toward the top of the Republican list of contenders at the moment) means further encirclement and provocation of Russia and a belligerent stance toward Iran. Not to mention the furtherance of oil industry interests at the expense of other energy forms.

There's a load of waffle being talked by the Republicans about the poor state of the US Military. It's complete tosh. They've never been more powerful and never been more dangerous.
Pray and hope for Sanders in the White House or we're another step toward the modern equivalent of World War 3.

Obama's haphazard withdrawal from Iraq (including telling the world when it would happen) helped sow the seeds of ISIS' success.

That was going to happen whenever the Americans withdrew thanks to position they'd put themselves in, that of a hated occupier. Though if I remember rightly it was Bush who initially ordered the retreat.
But you can't keep the withdrawal of 170,000 troops secret anyway. Too many people need to know in both America and Iraq.