Sacrificing doesn't affect happiness, but the Sacrificial Altar itself is a negative happiness improvement, turning a happy into unhappy - in fact a city must have a temple before building an altar.
Status update:
A - Mayans (Deity): Charis, Grimjack, Kylearan, Dwip, Justus
B - Incans (Deity): Hotrod, Rubberjello, Sir Bugsy, Gormdragon
C - Aztecs(Sid) : Ridgelake, T-Hawk, Speaker, Coffee
@Bugs, Coffee, Justus, Gormdragan, welcome aboard
@T-Hawk: Welcome to C3C

I'm not clear on how hard you want it - first you asked to pump difficulty to Sid, then say it's probably hard enough without restrictions. I'll leave that up to you to decide, as either way your game will make an interesting comparison. In every other 'scenario' the difficulty has been only a tiny factor, as the civs get the same starting units no matter what, so the diff only affects the cost reduction. If Mesoamerica is no different, 'Sid' will translate to no more than Emperor-plus if not restricted. Now if unlike the others the starting units did depend on difficulty, then yes, it would be hard enough even without restrictions. If it were me I would go with 5CC/Sid to match the others, and we'll get to compare what difference difficulty makes. But if you want to go further out, drop the 5CC and go for domination -- whichever you guys prefer is ok, this is a "loose" series than an Epic game. I tentatively moved Ridgelake over to C because: i) your team is short, ii) he's qualified, and iii) he didn't object to Sid level ;p
I'll post the thread and A game now. 'B'/Hotrod, you guys are ready to roll, so start it yourself - Deity level, normal aggression, and there are no other options to tweak. (Well, try to interject the word Weed into your leader's name!) C guys should determine for theirselves 5CC/7K or unlim cities/domination. (Or an intermediate like 5 *built* cities, rest captured), and Ridgelake should confirm if he's ok with that or wants to shift over to 'B'.
There will be a delayed start for C anyway, due to those player schedules.
Good luck all!
Charis