I'd prefer to play regular FFH2 for this (I know the lore etc better) - this sounds really interesting (started reading The Divine Blood of Heroes)!
Given the FFH lore guru that magistercultuum is, I understand that his modmod stays very true to the original lore, i.e. No new civs, etc. I'd be happy to use his modmod or original FFH.
Idea 1: Victory Condition for each god (not game ending):
I'd be very anti this idea. I believe the last DI game died because one of the Gods wanted to "Win". For the Gods, it should all be about telling a good story. For the player, it's also about telling a good story but they have to worry about making sure their CIV survives the game.
Idea 2: Power of the gods depends on their mana in the world:
I'm not to keen on this one either. The Gods can discuss their plans before unleashing it on the game. Whoever is Dagda should temper any extreme plans. As regards civs getting different rewards for quests based on devotion, mana, techs researched, etc , I thought that was all part and parcel of the flavour within a DI game - Gods tend to help those Civs who support their Precept or help those they're trying to convert. I wouldn't try to invent any mathematical rules around that.
Is there a way to prevent the player from reading the gods writings other than a spoiler? A QuickTopic maybe?
If you can't trust a player to play in the spirit of the game, you might as well give up. The mortal player is the core of the game. All the Gods are replaceable. I'd trust mortals not to open properly labelled spoilers but a lot of the God discussions can be done on a separate thread.
Suggestions for gods' rules:
I'd see these more as guidelines than rules. Again, I think if it makes good sense for the story and you can sell it to the other Gods, it should be allowed. Regarding the Danalin example;
Kilmorph could lower land to allow the sea to rush in or Bhall could raise an oceanic volcano (example of an instant mountain), triggering a tsunami which permanently floods some land. I think if a God can weave it into the story and justify it with their Precept, then it should be okay. I'd also be very much in favour of stories where Gods describe deals being struck between them, so that the Precept of one will be used to benefit another (e.g. Mammon striking a deal with Kilmorph to create a temporary land bridge allowing his worshippers to claim valuable resources).
I'm in full agreement with the theme of your suggested rules, "Don't go mad, just because you're a God.". Smooth, subtle changes will make for a better tale.
The occasional dramatic flourish could add something as well though.