Real will meet Kashima Antlers of Japan in Sunday's final in Yokohama, looking to become world champions for the second time in three years and earn a record 21st international title.
The Spanish giants have already won 11 European Cups, three European Super Cups, two UEFA Cups, three Intercontinental Cups and one Club World Cup.
Karim Benzema's classy one-touch finish put Real ahead in first-half injury time, easing nerves after they had toiled against the Mexican side.
New Ballon d'Or winner Ronaldo rounded off a much stronger performance from Real after the break with a powerful low finish in the 93rd minute.
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"The first half was a bit difficult for us on a hard pitch and we couldn’t move the ball as we wanted to so scoring just before the break was great for us," said coach Zinedine Zidane.
Ronaldo's goal appeared to be ruled offside by Paraguayan referee Enrique Caceres before, in consultation with the video official, he eventually gave the goal.
"We have to adapt to what (governing body) FIFA wants. The situation at the end was a bit messy. If they want to improve things with technology that's great but it has to be clear," added Zidane.
Real initially struggled to break down the CONCACAF champions and the only opportunity before Benzema broke the deadlock was a Ronaldo header that struck the post.
Zidane's team took full control in the second half, producing a series of attacks.
Benzema wasted a free header and Ronaldo saw a stinging effort saved by goalkeeper Moises Munoz.
Substitute Alvaro Morata also spurned a late chance to kill off the Mexicans before Ronaldo's stoppage-time strike.
"We're prepared for the final... it's an important trophy for us," said Zidane. "We've come a long way and the change in time zone meant we struggled to make a good start to the game.
"We're professionals, we didn't come here to think about other competitions. We’ve got two days to rest and on Sunday we have a vital game."
(Writing by Richard Martin, editing by Alan Baldwin and Tony Jimenez)
