Pollution is caused by improvements within your cities that produce pollution, as well as nukes, which also contribute to global warming.
Something that I've realized about building close together, that hasn't been mentioned yet, is that in the higher levels of the game, it's necessary to build cities closer to one another because it takes less time for settlers to get to where they will build. This is a big advantage for the beginning strategy, since one of my main goals is expansion, expansion, expansion! With more cities in a shorter time frame, you'll be able to support more units that are produced by many cities that are somewhat close to your capital, and since it's not till the industrial ages that you can build hospitals, you might as well build closer together. If you feel that in the future this will hurt you too much, try disbanding some of your less productive cities, or just have them produce workers and settlers until those cities have only a few civilians to work the city radius, allowing neighboring cities to use those squares to their benefit. Don't forget to sell all the improvements of cities that you will be disbanding!