This kind of difficulty is meant to be a sit back and relax kind of experience
To my knowledge, there is no difference in AI behaviour in different difficulties, so, rules how to behave are true, regardless of difficulty.
Difficulty basically means, how much stuff AI have (please correct me if im wrong).. the higher difficulty, the more advantage it has.. so, if he don't have "stuff" AI will kill him even on Settler, simple as that.
So if you don't use your advantages, to have more "stuff" you will be crushed
Also, you can have easier time on easier difficulty, but the line have to be drawn any way somewhere. You shouldn't be able to to win doing nothing even on easy mode.
Honestly, if AI was able to pump up 20 units mid Medieval era, from 6 cities, i would lie, if i said, i'm impressed xD
The game you lose, are good to analyse mistakes, the games you dominate are the signal you should try higher difficulty, but the are also an indicator, that you finally
doing something right
Also cash is basically liquidated production. So unspent cash is just wasted potential. Investing in worker or buildings have no penalties, and early games you can invest in units, since they should get some
xp on barbs, so you dont need delay army till barrax/armoury that much.. Each invest in building is few turns, if he did 1 city, he would be much faster at point, when he
cant produce any more building, so he could just pump units.
But also learning, that your deployable army is something that determine respect of other civs is kinda crucial observation. I also ignored for the long time this aspect, but, even if your production
would allow you to make three times more army then your opponent, he will not take this into account, while attacking you.
This is also basically issue of any strategic game including like Starcraft 2.. you have to divide your production between eko and army, and if you go too much in eko, you can be attacked with your pants down.
Also, and this is something i learned relatively late. If you have many units near AI border, you have negative reputation since "Your army deployment is extremally dangerous". But this works both way.
If the AI doesn't want to provoke you, it will not keep massive army near your borders.. So if you see "too many units" you should get worry. Many times i accidentally scouted army coming in my direction, and
starting to prepare to war, just to see, i was right
You can also use option in "discuss" something "You want to attack me you swine", which forces AI to attack you now, or promiss you, that will not attack you in 20 turns.
Which in games terms means, he will get "backstabber" flag if he does, and AI don't like backstabbers