Could you explain your idea about the Great Merchant Economy a bit more?
Commerce gives +25% gold in the capital. Using custom houses around the capital only is to boost this bonus further to create a mega gold output city that can feed much of your maintenance costs. You can specialize however many other cities you want for Science, also bear in mind that trading posts only give +2 Science under Rationalism, and from what it seems, Piety is actually a lot better for the extra happiness. Rationalism will really only be used temporailly in most games, I think a lot of players will be switching out of it for Piety later on when the tech advantage from Rationalism becomes too small.
With Commerce, plus a Market, bank, and stock exchange, each customs house around your capital will output 8.32 gold. That is still a lot more Gold with the multipliers in place that a trading post would output even under Rationalism with both Gold and Science combined (4.32 Gold and 2 science from Trading posts = 6.32 total vs 8.32 from custom houses).
You should still use somes GMs to conduct trade missions. They gold you recieve should be spent on either rush buying some infrastructure or military (whichever is needed), or on upgrades. The amount of gold you can get from GMs can put you very far ahead of other Civs that dont have that much Gold, it worked very well in Civ IV with coastal rexing and paying for increased maintenence, and this is trying to adapt on from that tactic.
No. It isn't. Hannibal and Willem were costal civs because their economy reaped benefits from the sea. England in civ5 doesn't need a coastal empire to utilize it's advantage. Are all of your cities going to be building your military?
There is no synergy to be found in having a primarily coastal empire as England. No more than any other civ, really.
You are right that there is no advantage to be had from building all of your cities on the coast as England, I dont think I suggested building every one along the coast, but they quote that you responded to was a reply to another query about having to waste production on Lighthouses.
I think it would have been better to say 'Why wouldnt you build lighthouses in coastal cities?'.
You should still build inland if there are better city spots, but if you do build the Colossus, you can settle as many coastal cities that you can with good spots.
Also, dont forget that with map bias on, Englan will start off near the coast anyway, and might have more chance of finding better coastal sites.