1) I agree about Engineering, I originally had the mine/lumbermill production bonus there to spice it up.
Something I've been talking about with Gazebo is adding the fundamentals of CSD to this mod, since I feel localized diplomacy significantly enhances the game. It'd be the units themselves, and some diplomacy bonuses on the Agra Fort, possibly +50%

and free promotions for diplomatic units, maybe also a friendship bonus with citystates. This will make that national wonder much more desirable for anyone going with a citystate strategy, and by extension make Engineering a more useful tech.
2) I agree about strategic resources. I originally had the nodes as 1 and 2 resources per deposit, roughly 50% deposits of each size. There were a lot of protests about 1-deposit sizes... I don't really remember the specific reasons, it's somewhere in the Combat thread. I still feel the 1-2 split is better and easier to balance. I also once asked how people felt about adding strategic resource requirements to early buildings (such as the Stable or Forge) and the response at the time was mostly mixed or negative, so I didn't pursue the idea further. If you feel this might be interesting (as I do) then I could explore some options in the next beta cycle.
3) I agree about militaristic citystates. I've had plans to change their effect for a while, but it's somewhat difficult because anything I do will have to be manually coded in lua. It's on my todo list though.
4) Garden did used to have an Artist slot. It seems reasonable to put a culture point on it, and I'll do so.
5) I felt Watermills were too desirable and generally spammed in river cities. My goal is to increase and improving our choices, and if a building's always built everywhere we can do so, it's not really much of a choice. This is why I made the building more situational and targeted for specific cities:
- Cities that really need extra production (like a military city).
- For the Great Engineer points.
- When we have the resources nearby.