Some of this is pretty good... but some of it makes no sense.
A raid on the Pope adding faith points to Islam makes little sense. Nor should it make other faiths stronger...
I do somewhat agree with no actual capturing of Rome... but getting money when you successfully sack the city.
Now, in history, this isn't how it happened of course, there were times when the Papacy was basically ruled by the temporal powers... Perhaps this could be allowed, but the city, being Rome, always would have a huge chance of instability/rebelling, making it not even worth trying to hold on to...
The idea of excommunication should probably be introduced if you do this. Some kind of modification of what happens if you refuse resolutions... where all the Catholics hate you. You attack the Pope, you get excommunicated. You win, well, you are no longer excommunicated... something like in Total War Europe... when you conquer Rome, the Pope is killed... you are now ok...