@Thal
I've given this issue some thought over the course of a number of days, and from my own experience in the beginning of the game, I feel that a different approach to the problem might be in order. Feel free to take this all with a grain of salt as it -is- a big change I'm about to propose, but its an idea that I've been tossing about in my head for a while now. My reasoning for it is below, but if you want to skip ahead to the idea, feel free.
One of the issues that I've run into during the beginning of the game.. and nearly every game, is..
"Oh! That looks like a great spot for a city- ..Oh wait, there's no luxury resources there, it'll just drain my happiness..." Only to see later that the AI comes along to the take the spot. This is quite frustrating as you could imagine, particularly because it feels like you were just cheated out of a great spot. One could certainly argue it's my fault I lost the spot, but lets think about this from another angle for a moment.
As Thal mentions above, when the capital is automatically better at nearly everything, it becomes an almost no brainer to put the best stuff in it, but it goes beyond just buildings and wonders. The citizens within the capital, as well, are generally -more- productive then those in satellite cities. So, when I look at my happiness counter up at the top, and unless I'm
absolutely swimming in excess happiness, I logically conclude that I'm better off saving that happiness towards new citizens within my existing cities, if my growth is there. (Particularly the capital) New citizens within current a city use less happiness, then if I were to found a new one. Moreover, that new city isn't going to be making happiness buildings for a while.
This can lead to a fairly.. boring game where I'm hunkering down for a while until I can get a nice padding on happiness so that I can expand without feeling so constrained. The problem is.. well, that problem I mentioned above is still there. Many potential city spots give off the vibe of
'Why bother?' because they don't have any luxuries that make it worth it. After all, new cities count against acquiring polices as well! ..at least until you can get their culture production up.
With these thoughts in mind, I feel that expansion shouldn't be so.. heavily gated behind happiness. Of course, the problem is we can't just give a bunch of happiness at the beginning of the game, like you pointed out. Too many things are balanced against it, particularly military conquest.
To me, this seems to be the underlining issue: Peaceful Expansion and Military Conquest are tied to the same mechanic.. with the same underlining math. Lets say I have 10 Happiness, as an example, then I have enough to either start a new city or take a new city. If I have less, then I probably want to hold back on both. (Of course, in the later game you'd want more then just 10 happiness to occupy a larger city.) Math-wise, I feel these should be more.. disjointed then they are now and that it should easier to expand peacefully, then militarily. Planting your own city strengthens you, but does not weaken your neighbor while it does when you take one of their cities.
The Idea
Without further a-do, here is the general idea: Rebalance
all the bonus, and luxury resources to give some amount of happiness, even allow duplicates to give happiness. My general thinking is to balance all the resources to give a similar amount of yields when improved, but obviously different types. Lets say we're balancing around 6 yields...
Examples:
Wheat: 5 Food, 1 Happiness
Fish: 5 Food, 1 Happiness
Deer: 3 Food, 2 Production, 1 Happiness
Oranges: 3 Food, 1 Gold, 2 Happiness
.
.
.
Silver: 4 Gold, 2 Happiness
Gold: 3 Gold, 3 Happiness
Etc. So yes, I'm basically saying to move the Happiness as a yield to the tile, and only getting that happiness when the tile is improved. This forces us to actively work and improve the tiles to get the happiness. We can't just plant our flag and get them automatically, some further work must be done after. It also encourages us to better protect these resources from enemies. Barbarian ships will be even more annoying when we're loosing both our food and happiness when they sit in our waters. Same with our land. People would be more inclined to.. 'defend at their borders, then at their gates. (Cities)' Sorta thing.
Moreover, its more realistic. People with an abundance of food are naturally happier. 'A full stomach is a happy stomach'. Or they have more to sell then the next person working a non-resource tile, etc.
This setup would fix the,
'Well, this looks like a good spot.. buuuut-' problem! Any spot will at least be a 'good' spot, regardless if it has any luxury resources or not. Obviously, some spots will still be better then others depending on your current situation, but the extremes of 'have' and 'have not' will be lessened when it comes to happiness. Most spots will have a certain amount of happiness around them that can be tapped into to help start up the city, closing the gap between when you can start building happiness buildings there.
Now, the most obvious problem this whole idea causes is perhaps the abundant excess happiness that will be created. Well, obviously we'll need to tweak/create more sources of unhappiness. Here's my current idea: Take a page from Civilization NiGHTS and have military units create unhappiness, although only around 1 unhappiness per-unit, to keep things simple.
This adds another layer of realism: Mother and daughters don't want to see their husbands and brothers go off to war and fight, more over, some of them may not want to off and fight either. But for some reason or another, they are. Policies could even be added to lessen the effect of unit unhappiness, adding flavor to the mechanic.
Further more, these two ideas help disjoint peaceful expansion verse military conquest. With this model, you would only need a small handful of happiness to start out a new city as long as it has some resources nearby. But, a military approach would require you to actively build up a surplus of happiness to support a large army.
The other problem I could see with this setup is trade. How would it work after this change? In all honesty, this part I'm not entirely sure.. But my general line of thinking was this: Most of the luxury resources that the game currently presents us with are raw materials, not finished products, yet these are what we trade. But in the real world, what we typically consider a luxury is usually a finished product. (Obviously food is an exception here)
So, my idea here would be to not trade these raw resources, but to come up with a line of 'craftsman' buildings that make trade-able finished goods from the raw resources. Perhaps only allow one of these buildings per-city, or have some kind of limit. Moreover, perhaps come up with a system that makes that trade-good 'unique'?
For example: Athens has copper nearby, and the city has a smith building that creates bronze from it. It then becomes 'Athenian Bronze' which no one else can duplicate. Think along the lines of Swiss Watches and Amish Furniture!
If you have multiple sources of copper near the city, you'd get multiple copies of 'Athenian Bronze', but only one would give you some happiness. Encouraging you to trade the duplicates.
So, that's the general idea of my thought. Sorry for the long winded post!