You can definitely still expand and it definitely still is worth it. It's just more difficult and requires you to build more infrastructure to support it (aka expanding in phases). I like it and think it's realistic. You don't spam a bunch of 1-5 pop cities and expect it to be better than a well-structured, streamlined society. BNW has added in this realism. Notice that the AI's actually expand TOO much as dw0 said. I've been in games where they exploded outward and then couldn't keep up in gold, science, or culture. Eventually they may catch up, especially if you trade them all your luxuries to enable them. I noticed Spain floundering after conquering her whole continent. Being a gold-focused tall India, with all of the world's CS's shipping me luxuries, I sold her some extras for good money. Almost the next turn she's back to warmongering and starts crushing some of my city state Allies near her. My mistake. AI is still bound by the same rules, just has higher base happiness.
That being said, New cities are definitely still worth the effort, you just need to have a productive and happy base to expand from. It makes me have to work hard to tame all that land and stay happy and productive.
If you're having trouble with happiness try religious help. Gives dramatic early help. I like pagodas. I'll save some faith. When I pop down a new city my happiness drops around 3 and 2-10 turns later when my religion spreads into it I instantly buy a pagoda for 2 free happiness. You can get almost 1.5x the amount of cities just buy securing a unique happy building like this. If you keep back some gold I've found a city near horses in the first half of the game is almost always viable. settle and immediately buy a circus on the cheap + new horses! Also, focus on policies that encourage expansion if you want it. Liberty is good for this. Patronage is "amazing" for this. It doesn't buff you for number of your cities, but encourages you to have more output and gold as this impresses CS's who ally you, who give you luxuries, science, and happiness, which gives you much greater capacity to expand...