Yup, the Spanish Civil War and Japan's continuing war in China were the crucibles on which in-service combat aircraft were forged and therefore judged. Both conflicts were regarded with horror for their sheer brutality, which after the Great War is saying something, as much about public reaction to the nature of warfare as it was progressing, as the new means of waging war itself. Guernica was bombed on 26 April 1937, with Ju 52/3ms and He 111s comprising the main bomber types.
Its also worth mentioning that one of the world's great WW2 bombers first entered service in 1937 that hasn't been mentioned; the B-17 Flying Fortress. The first 12 Y1B-17s arrived at Langley Field between 1 March and 4 August, which was a significant step forward (despite the B-18) for the USAAC, although the 2nd Bombardment Group with its new bombers could hardly be described as combat ready.
I'd have to go with SR in his appraisal of the Blenheim 1, and his thoughts on the Whitley; it was an advanced aeroplane, but still had growing pains, despite its potential in terms of bomb load and range. Still, if Britain went to war in 1937, the Whitley was the RAF's newest heavy and it would have to do, alongside the Handley Page Heyford, of course.
Meanwhile, although the Luftwaffe had the He 111B-1 in service, which was produced in small numbers only and saw service in Spain with the Condor Legion, its primary bomber was the Ju 52/3m, with the Ju 86 being delivered in increasing numbers that year and seeing combat in Spain. The G3M represents a very modern bomber for the time with excellent performance and was proof that Japan could match existing types entering service in armed forces round the world, something it took the rest of the world a little bit of time to accept.
It was first conceived as an unarmed long range aircraft for the IJN; the first 'speed bomber', years before the Mosquito, but defensive armament was a necessity and the following 9-shi spec to which the production aircraft were built had defensive armament, crucial against Nationalist China operated US fighters, such as the Curtiss Hawk biplanes and P-26 monoplanes. Its long range saw it carry out carpet bombing of Chinese towns and cities out of range from contemporary bombers, as well as tactical bombing of military installations. Its use then, was a foreshadow of the war to come and this is often overlooked in history as in the West we turn to the Spanish Civil War as the benchmark for the forthcoming conflict, but the G3M was flying multi role combat operations at greater ranges than ever before.
Japan also operated the Mitsubishi Ki-1-II heavy bomber in China, which was not well liked in service and crews preferred the outwardly similar Ki-2-II light bomber. Both were contemporary to Junkers designs being based on the Swedish built K 37 - the G3M sharing some of this DNA in its wing and control surface configuration. These were very much contemporary performers despite being all-metal monoplane designs. The G3M was a big step forward by comparison.