Am I the only one that finds it rather easy to see how a nation views you?
Go and greet them. If they say something negative, chances are they view you poorly. If they say something positive (keywords like: friend, ally), chances are they view you positively.
Go trade with Catherine for a while and then go demand things from Bismarck and gauge their reactions.
As for the two choices, the civs seem to 'talk' with the other civs that the two of you know. For example, if you place a lot of troops along the border of somebody you don't have open borders with, they will pop a message up that asks you of your intentions. You have two options:
1. Just passing through, don't worry about it.
2. Die!
If you choose the second option, war is declared and all is well. If you choose the first option they'll say alright. If you then declare war on them they tend to say "Others will hear of your treachery."
I did this in my last game. Before I did this Rome was friendly and open for trading. After I did this, Rome was friendly but not open for trading. Ever.
Not even accepting of peace after I took all but his last city.
I concur. I think this system of diplomacy is much clearer than people think. The AI avatars smile at you (or some like Asika attempt to smile) and they compliment you on various things when you go to see them. You can also pick up titles, however. Treacherous, brute, weak, etc. if you commit certain actions.
For example, in my recent game, I had the Egyptians sitting on some fat wonders and blocking my western advancement. Sorry Ramses... time for you to die. I crushed them and when I went to some civs that were neutral to me (perhaps they feared the same) they addressed me as if I was a bully (can't remember the exact phrasing). Others with whom I had good relations still complimented my economy or my military, but ones with whom I had neutral or poor relations were not happy.
Then there was the settlement period where I got too close to Alexander. I told him I wasn't going to do it again, but I settled a little further away. Apparently it was not enough and he called me all kind of bad names. He was next to last in score though so whoop-de-doo. He's not done much other than scowl at me and I think he had a pact of secrecy with Nobunga because for a trading period, Japan was rather hard to deal with (they had all the gold mines and were asking for three luxuries in exchange for one gold), but two turns after I tried for a last time, Nobunga contacted me and was pleased to do a 1:1 gold for gems trade.
Anyway, long story short, by contacting the civs regularly I knew who I needed to watch and who I didn't.
Finally, to address the OP. The "very well" comment could have penalties with some other leaders. Perhaps this is why Nobunga had trouble with me because he saw me as weak not standing up for myself, but Catherine had no problem because she's cold like a Russian winter and even though she may say "very well" she really means "you'll get yours soon enough".