Wouldn't other nations band together to stop a player who just wiped out the entirety of non-British Europe?
Wouldn't there be a lot more instability from being in near constant war for 500+ years?
etc?
More instability from
near constant war... There is war weariness, and I also think it is a bit too low. But even if you triple it from -1 to -3, it is still outweighed by the massive growth bonus that you get when you dominate the huge boni of Europe.
Still the solution to long wars leading to war weariness is: Do short wars like hospitallerz mentioned.
In my recent France Run (described in detail in the Guide section), I wiped out Rome,Spain,England,HRE within 20 turns and afterwards had a grave-like peace in the entire neighborhood. There were some other short wars with HRE, Spain, Portugal and Thais but overall, there was peace. Especially because I knew when and where to stop to not have overextension issues.
And other nations DID
band together. To some extent anyway. My Napoleon was the hated worst enemy of Vikings, Russia, Poland, HRE, not to mention the non-christian civs... but they didn't declare war on me because I was stronger than any five of them combined.
But let us look not at how games go, but instead historically:
The second point:
Near constant war was the
natural state in Europe; if you look at that list you will hardly find a century when any important nation wasn't at war. As long as you devastated the others, your own Empire was doing fine. The era of Louis XIV was a "golden age" for France, he reigned from '61 to '15 and fought: Spain (1667-68), Dutch (1672-78), Spain and Dutch (1683-84), HRE, Netherlands, Dutch, Spain and Italy (1688-1697) and finally HRE-Spain and England (1701-1714). If not at war, he prepared for the next. Other nations were similarly at near-constant war, though it was just as often internal squabbles.
So, no, in my opinion
winning wars should not lead to instability, but rather to a substantial stability bonus that lasts for several checks. Weariness still occurs independently, of course. While losing a war should only matter to overextended or economical weak civs.
The first point however is one that is not really put into game mechanics imo:
Nations banding together to stop a common threat. That is the very historical concept of the
Balance of Power. Especially England, as a matter of principle, always opposed the strongest continental alliances even when it could have been part of them! Leading to diplomacy systems like
Stately Quadrille. The current diplomacy system however doesn't allow quick AI mood swings. France doesn't ally itself with Russia and Ottomans to fight against a dominant HRE-Spain alliance - because the diplo system rewards long-time investments in relations, not power balances. Even so, the religious difference alone would still be more meaningful than "+3 Together, we three would make strong allies against that dominant guy."
Usually,
that dominant guy is the human player, because the AI doesn't play well enough to break out of its historical box. (And when one of them does it regularly, they are nerfed like China.)