Bucephalus
Shooting from the lip....
The red dot looks like an excellent place to me place to me. I seem to remember my comment "Its just a colony, but with the wheat we might get a mediocre worker pump"
It most certainly would - if we were allowed to build them in this variant.

Making peace with Babylon sounds good, but I think we should capture one more city from the Iroquois. The lost city combined with a few more obscure factors should get us a more juicy deal. I highly doubt they will put up a serious fight.
My only concern with that would be that it will mean another three turns until we make it to the MA's, making it more likely that our free tech will be known; but I admit it has it's attractions, not least of which would be the extra Slaves.
OTOH, the deal is not bad now - they will give Polytheism and Construction for 420g.
Researching Lit sounds reasonable, at this rate we probably have customers in Babylon and the Iroquois whether we're first to it or not.
We'll have a monopoly on it - I'd bet my house that the others are researching MA techs right now; I'm strongly in favour of researching it - in the six or seven turns that it would take we would only save 300g or so by not doing so.
Looked at like that it's Lit for 300g; nobody would sell it to us at that price, and it will have greater value than that as a monopoly tech.