Ever seen the TV series Firefly? That's sorta what I envision the universe being like if humanity expands into the galaxy... Throw in the other species into the mix, and you have an Animorphs universe, post-54...
The world is moving toward one-world government, and has been for a while... Whether or not it's a good idea is up for debate... I think that the revelations following the war would make it infinitely easier for this government to be established... (the foreign policy decisions regarding aliens, the difficulties introduced by more powerful weapons on the black market, unrest with anti-alien fanatics, and terrorist groups looking to grind an axe...)
Once that one-world government is established (I think it would resemble the U.N... adding common monetary systems, etc...), I think that it would work closely in peace with the Andalites indefinitely...
The government, probably very socialistic to begin with, would quickly turn more and more so, aggravating more and more terrorist and seperatist groups, which would find their refuge in the rest of the galaxy, colonizing other planets and roaming free as much as possible...
These groups would be constantly viewed as a danger by the rest of the galaxy, including the earth government... which would do it's best in cooperation with the Andalites to bring these rogue groups (however peacful the group) into compliance with the collective galactic agenda...
This would cause constant small scale civil war, in which the Andalite-assisted Human government would have a significant edge... And there would be "good guys" and "bad guys" on both sides... some evil people... some evil Andalites, Yeerks, HBs, etc... And you would have your terrorist groups... your freedom fighters... your peaceful communities just trying to be left alone caught in the crossfire between a demanding, opressive (or an enlightened, caring) powerful government and uncooperative, terroristic (or heroic, freedom-loving) independence groups...
But, overall, I think this is a comperable situation to the one that Earth is in now... And life for the average citizen of the alliance will be significantly improved by the technological advances...