Yes, you have to enable advanced terraforming to scorch grassland to plains.
On a slightly different note, I am playing a monarch game as the amurites on tectonics/lakes, standard size, with 12 civs. This leaves everyone with enough space for half a dozen cities or so, plenty of water, but everything connected by land. The problem is, the barbs are too strong. Turn 190 or so, I went into world builder to see how everyone was doing (I had 2 cities, and was struggling to have enough units to be able to expand AND defend all my cities). The results?
With the exception of the clan and the khazid, every civ had at about 3 cities, and of the 11 AI's, 4 had lost at least 1 city to the barbs. The ljosfalter (led by jurla) were the worst case - they used to have an empire of 5 cities... they are now trapped in one, with stacks of goblin archers sitting outside pelting them. Every other civ was fairly well trapped in, with hordes of barbarians and animals sitting on the borders.
Also much to my dismay, the clan, who should have had the best position (after all, they only have to worry about animals), didn't even have any culture generating buildings in its 6 cities. For the other civs, only the khazid actually appeared to be doing good, with a nice little empire of 7 cities, none lost to the barbs (possibly 1 captured from the barbs).
If your goal is to reduce the early game expansion, you certaintly achieved that. However, at the moment at least, it appears that it has been swung too far in the other direction - with some of the civs, I could see signs of stagnation, and great difficulty in keeping up with the invaders...
-Colin