In many countries you can issue invoices without having a company or being a freelancer up to a certain amount. That should be everything Paddle needs.

Also, once upon a time, I checked with FastSpring (another alternative) if they could just withhold payouts until incorporation and they told me they can do that.

Not according to Paddle's signup form: https://vendors.paddle.com/signup

"Business type" options include Individual, Company, Partnership, and Non-Profit.

Yes, and Paddle will ask you to prove it.