lol, well I hadn't made it a system yet, but I just figured that out...gotten 2 lvls so far since I moved a spy into my capital. I guess advisors are useful occasionally.
Oh, and btw, happiness problem is now solved. Turns out I was 2 techs away from the stadium build and 2 policies away from the trading tree policy protectionism. That and some diligent gold-farming for colosseums and theaters did the trick. Now I have +52 happiness.

and the bonus is going toward culture.
After reading this post I realized I may have forgotten to uncheck the diplo victory. Is this a problem? I'm winning in pretty much everything but I only have about 2/5 of the city states allied with me currently...most of the others are just friends.