One of the biggest problems WRT both realism and gameplay is the market. From the realism POV, luxuries function like any other good -- the law of diminishing returns holds. The market should not be giving huge bonuses for the 7th and 8th luxuries, but rather for the 1st and 2nd.
From the gameplay POV, markets make it even more worthwhile to take over a city that gives you another luxury. Not only does the new city give you more production, it reduces your opponent's production. Win-win, to be sure. Then the uber-sweetness, the new luxury makes 3-4 MORE people happy in ALL your metros? What were they thinking? A far better marketplace would probably make each lux give two happy faces, or maybe even the first lux gives 4 happys, lux 2 & 3 give three happy faces each, lux 4-6 give two happys each, lux 7-8 just get the one happy each, i.e., the last two treated as if there were no market at all. The marketplace would still be a good thing, and luxuries would still be a good thing, but not worth destroying another civ just to get access to the last couple lux. Helps out the AI, too, since at present, you'd have to be nuts to give the AI the last couple lux on which you have a monopoly, but under a diminishing returns model, there's no huge benefit to withhold trading. Further, the reduction in happies makes things like the colosseum and temples more worthwhile, even if you are doing conquest.
I don't mind the corruption model, though I think I'd have done something along the lines of making the courthouse and police station increasing the amount of useful production, not simply reducing the percent waste, only to have that completely overwhelmed anyway. There are few enough places where CH and PS are worth building, and after you add enough cities, waste/corruption means they are total waste in some of what used to be 'tweeners, too. IMO, the CH/PS are even more worthless than the colosseum, and that takes some doing. But a building that's simply a waste of good coding is better than a building that offends gameplay.