The current number of affected cities is an arbitrary choice that is geared mostly towards the early to mid game. Larger empires will probably struggle to maintain happiness/health through resources. I am still collecting feedback on that and am willing to balance it further.
However, the reduction of overall effective happiness/health from resources is intentional. If you want to obtain e.g. additional happiness from civics and technology, you should adopt civics that provide happiness and were previously ignored because the happiness was already provided by resources, or you should actually build buildings unlocked by technology that provide happiness (either directly or through resources), another game aspect that could previously be ignored. Large empires may additionally have to rely on the culture/espionage slider for extra happiness.
I have not yet revisited building effects to balance for this, however. I could imagine making this somewhat more pronounced, e.g. give additional happiness to Amphitheatres etc. In short I'd rather balance on this end than extend the number of affected cities so that bare resource effects are as powerful as they were before.
Edit: I could however imagine letting economic civics influence how cities are supplied with resources, e.g. the capital could always be supplied with Redistribution, Mercantilism could prefer core cities over colonies etc.