I actually only see the Federation continuing to absorb everything else around it. To be frank, I think this is one of the underlying themes of the whole franchise [that many people miss]: that all the 'bad guys' with their Authoritarian, militaristic states see the universal appeal of the Federation. At its core, its ideals appeal to all, it is simply a matter of time before the peoples of neighbouring states realize that.
But I also think that there may come a point where absorbing so many others becomes problematic. There could conceivably come a point where the Federation is effectively too large to govern. How many worlds can the Federation absorb and retain its character as a liberal representative democracy? How large can it grow before Starfleet is effectively unable to defend its borders. This is one of the things that eventually brought down Rome. Indeed its vast nature was also one of the the elements that eventually leads to the fraying of the Galactic Republic in Star Wars
and the Systems Commonwealth in Andromeda