I agree with the increased cost to cities improving the value of towns. I also agree with customizing where the food from towns goes. To make towns more useful, I'd change 3 more things:
1. I'd increase the settlement limit by about 50% in Antiquity and Exploration
2. I'd make food much harder to get in cities.
3. I'd make the town specializations much more focused and powerful. For example, I'd allow Fort Towns to spend production to build units (maybe at a decreased cost or at half cost, while the rest of the production is converted into gold) and trade towns to build merchants, fishing quays, and trade buildings, I'd allow Urban Centers to build/buy at least the tier 1 science and culture buildings, Hub towns to build/buy influence buildings (I'd also allow the hub town to generate influence based on foreign settlement connecitons, Farming and Mining towns to +3 their production on improvements rather than +2, etc... I'd also prohibit or increase the cost of buying units in the non corresponding town. Want to buy an Archer in the urban center town? That's going to be double the cost buying the archer is in the current build of the game. Same for buying a merchant in a fort town, etc.