The 6 Civs on the continent were still isolated from meeting others so the best they could have would be only from each other there.
500 AD is not too late for the middle ages... it is simply the way the game worked for that particular game. Many different things can happen in a game with the built in random factors.
The Mongols could have possibly caused a set back in development if they affected the workers with their Hidden Nationality Units. Still, I believe the main lack of techs was caused from not being able to meet others to gain more techs.
Not sure what level you are playing but the AI has different levels of Trade between them... Monarch AI Trade Rate is 140 up to 200 at Sid Level. That said, the AI must meet other CIVs to trade with them at what ever Trade Rate they have.