I read it, it suggests "changing where settlers start". Which would (for a number of maps) make huge swaths of land unusable for start locations.
OK, it seems my wording was ambiguous here
What I meant by this was not changing where the settlers start, but removing forests from the tiles where the settlers start, and maybe a few others nearby so the player has a choice.
As for your other points...
1. Settling on Forest: Instant Hammer Bonus
Completely unbalanced. 0 Turn Hammers.
It is not an instant bonus. You have to spend a few turns clearing the forest before the city is actually built, the same number of turns it would take for a worker. The effect would be similar to founding the city next to the forest and chopping it right away with a worker.
2. Disallow settling on Forest, until Iron Working.
Takes away player options and adds... what? (I don't see it)
Only until Bronze Working. If you need to settle on a forest to optimize the city location, you'll have to research bronze first. By the time you have built a settler you'll have teched it anyway for its other benefits so it won't matter. The same applies to the AI so it won't affect them either (Deity aside, perhaps).
As for jungles - these are pretty much useless until you can clear them anyway. You can send your first couple of settlers somewhere else usually (though start locations right in the middle of a jungle would need to be addressed). This would make IW a higher priority for civs starting near the jungle. It would add another minor tech race to the early game, with the first civs to tech Iron being able to claim the jungle resources rather than someone founding a city that will be useless for years.
As for what it would add to the game: realism. You can't just build libraries and temples and such in the middle of the woods - those trees have to go. Which gives me another idea - maybe you could put a couple of small buildings (the beginnings of a new city) in the forest, but to really start developing the city you would have to clear the forest.
3. Settlers can assist Worker chopping so the new City would get hammers.
Workable, would need testing - an interesting boost to a newly formed city, instead of a reduced hammer output going to the closest other city.
No doubt it would need testing, especially to see how the AI handles it. They do know how to chop forests, so it wouldn't be too hard to make the AI send a spare worker (if they have one) with a settler to a new city site. Even if they don't make use of this, though, I don't think it would give the player much of an advantage - it's only a couple of turns we're talking about here. What's more important is improving the land around the city.