If you actually CARE about each of your cities I think they need to be well spaced or you get too darn many of them to keep track of.
In fact, one of my favourite aspects of the game is to, after exploring a continent, make a puzzle of deciding either how few cities it will take to make every square useable, or how many cities can fit without any overlapping.
Closer spacing is fine if you intend to make no improvements and just want caravan/catapult factories. I just happen to prefer the scientific game to the conqueror's game.