On the unhappiness ideas for using nukes I liked the idea about if you are already worst enemy that it is much less, I don't think we had riots (or even protests for that matter) when the US dropped the bombs on Japan heh. Perhaps tie it directly to WW so that if your ppl are wary of the war or if the enemy refuses peace terms then unhappiness is eliminated or much less.
Same goes for diplo hits... Japan is a major ally of the US now adays, granted there was a kinda puppet-stateish installation of democracy. I'd almost see more fear based diplo hits than anger by other civs that were not nuked unless they are allies of the nuked. Of course that gets into who the aggressor of the war was too and can be considered much differently post ww2 with the UN and so forth now. Did we take a big ever-lasting diplo hit with say the UK after ww2? It's not so much even the peoples opinion on a nation either, but the government foreign policy towards them (depending on your government). Certain governments are not going to care at all what the ppl think about another civ and are only making strategic choices based on their interests.
All that said, I understand that it is more about gameplay and if some unrealistic elements are nesc then so be it to keep it Fun and Balanced as much as possible.