If my multiple-entry Schengen visa application is rejected, can they still issue me a single-entry visa instead? Or will the whole application be rejected?
I don't believe that there is a straightforward (official) answer to this.
A multi (or dual) visa will be issued based in the given itinerary.
A visit to Croatia would be valid reason, since Croatia requires at least a dual entry Schengen Visa.
Another sample given in the
Annex to the Implementing Decision amending Commission Decision No C(2010) 1620 final of 19 March 2010 establishing the Handbook for the processing of visa applications and the modifictation of issued visas
Recommended best practice:
In case an applicant is to travel to several Member States on different trips within a short timeframe, consulates should apply a flexible approach and consider this as one trip for the application of Article 5(1) of the Visa Code to avoid unnecessary burden and costs for the visa applicant.
So if, for your planed visit, no multiple visa is deemed needed and no other objections exists, then they will probably issue a single entry visa.