What, if any, variables are there that could approximate some sort of war-weariness? A large empire should have a decent tech rate, but atm there is nothing to stop the successful warmonger from simply continuing on from civ to civ. Nerfing puppets is an excellent place to start, but I think some extended warring penalty would be a more fundamental solution.
Just brainstorming here, but I think it might be possible to (begin to) approach the problem without adding whole new mechanics. I haven't actually played it (fantastic ideas but a bit too far from vanilla for my taste), but reading through the thread for Alpaca's mod gave some interesting insight. The various changes effectively make units more expendable, and the sheer cost for an aggressor to replace the lost units effectively makes you want to get out of war because your empire is suffering too much. I'm speaking from ignorance here though, so Alpaca or anyone familiar with the mod, please pull me up if I'm way off base.
The quote that was of most interest was this:
A little more feedback from my 'no unit upgrades' testing. It is brutally difficult to build infrastructure while being at war. I have to constantly be producing new units and those units are not heavily promoted so they tend to die much more than usual. Also since my army regularly consists of half units that are below current tech levels it is extremely difficult to steamroll the AI, even with good tactics. When a longswordsman attacks my swordsman he dies, even though I do have a longswordsman myself nearby.
This leads to the situation that constant war is *harsh*. You will be devoting tons of production or cash to producing new units and your economy will suffer tremendously. In peacetime you can live with a smaller army that is more outdated and get your infrastructure going again, but the old strategy of constant warfare combined with excellent infrastructure is completely impossible. I was definitely able to make war profitable a lot of the time but taking over an enemy civ or just snagging a few border cities was costly to attempt and disastrous if the attack failed. Maintaining a two front war would be catastrophic.
I personally love it. War, instead of being a source of experienced soldiers and golden ages through redundant GGs, is a huge drain on your economy. It is really good to get back to peace as soon as possible if your war is going nowhere fast.
Anyway, I think the main thing I took out of that as a useful change is
increasing the ability for a (player) aggressor's units to be killed/rendered useless in the short-medium term. So that an aggressor is required to keep pumping out units to keep pressing an invasion forward, until the point where the grind on the economy outweighs the gain of territory. How to do this effectively is the million dollar question!
The no upgrades/making units cheap approach is interesting but I'm not sure it's the solution; for one thing it kind of promotes having a lot of extra obsolete units around, which is not great with 1UPT - and the intention with 1UPT seems to me to have been to have armies consisting of relatively few units (eg 10 units or less) at any given time to prevent clogging the map with units and still allow tactical maneuvering.
So it seems you might want small armies (which does imply expensive units with long build times) but at the same time you want a defending civ to be able to produce more units as the invasion goes on (which implies cheaper units that can be produced as the war is ongoing).
Healing seems to me like it could be one place to hit. Cut down healing on the offensive, and you have more attacking units dying or at least being so badly damaged that they have to retreat for ages and be replaced by reserves. Alpaca doubled HP for one thing - that's a really interesting approach but I suspect it might take the vanilla feel away from the battles themselves.
I think one approach might be in reducing the healing ability of newly-conquered cities. Currently, you assault a city, your units get hurt a bit, then you take it (and its borders) and heal for a couple of turns then do the same thing again with a refreshed army that even has an extra promotion or two.
This may have other associated problems, but if (for example) a city still in unrest exerted no cultural radius (thus not allowing faster healing or the "within borders" bonuses) and only gave very slow healing in the city itself.
That way, it's harder for a unit in enemy territory to find somewhere to effectively heal back up.
Of course a stronger AI that can take advantage of opportunities to take weakened units (especially promoted ones) out of the picture would be ideal, but I should stop dreaming
Maintenance is another approach; if you can build your army quickly, but can only have e.g. 10 units at a time because of crippling maintenance costs, that seems to "solve" the dilemma. The problem is that it's insanely hard to balance out, not to mention making the AI use it properly. Not sure whether this is a useful tool for this sort of balance or not. Limited strategic resources are great for this though; at least you can only have a limited number of elite units at once, no matter how cheap they might be to produce.
Another aspect might be to tone down promotion a little - make the really powerful ones come later/increase the xp requirements for each higher experience level or something. I also noticed you've now got Siege as a level I promotion, and I'm not sure whether that helps or hinders, since it means any old melee unit that comes fresh from a barracks with one promo can effectively bash itself against a city.
Another idea might be to have extra unhappiness in conquered cities while you're still at war with the former owner - incentive to make peace and get it back under control? Not 100% convinced I like this idea though...
Anyway these are only guesses at the mechanics to fix it, but I think maybe there's something to be done with these sorts of factors to make continued war really unpalatable for the conqueror before adding whole new mechanics.
EDIT: I also like Ahriman's ideas around unhappiness with conquest. That -33% combat penalty is pretty ugly...