The European Reputation penalty and the North American Reputation Bonus basically affected starting statistics, they are not permanent and all encompassing things. On top of this, your choice of a nation state started you with positive rep anyways, I think it was like 3, so it was basically equivalent to starting as an Independent Group on another continent.
Your stories did do it. I understand when you say they aren't "that good," but I don't really spend to much time weighting the "literary value" of stories, the 1-4 system is about how many details are there, how much time it looks like was spent on it. It is true that, say, Iggy writes these long detailed stories that give a good feel for how his race operates on Earth now and in general one of his stories gets closer to a 4 than one of your stories. Most of your stories get a 1 or a 2. But you write a lot of them, and I count each story individually for Reputation (not for science) so if you did a little intro story to your diplomacy it got, say, 2 points, Then you write another story and it gets 2 or 3 points, and then you do some diplo with an intro story that's another 1 or 2.
It adds up.
Yes, there is a strong Mod Bias in this game. I prefer factions who are involved in the game, the ones who send coherent orders, their dreams tend to come true even if I do make them jump through a hoop or two on the way.
Let's take a hypothetical example. Say you started on North America with a starting stat rep bonus as an independent organization. Let's say you never wrote stories, rarely responded to diplomacy and always in the least committed ways, in addition to this let's also imagine that the only thing you ever sent for orders was "Build more soldiers," nothing else, no explanation as to what to do with these soldiers. Well, in this hypothetical example your rep would still be only like 6, which is like 1 more than it started.
You would be a pretty minor power, even if such a faction did exist, would it be anything more than hypothetical?
open Borders also helped, but it added to several other people's reps too. Taking a Major City also lifted multiple reps.