Well I have been playing on EPIC with the x1.5 modifier so I was surprised how many units there where. I like your way of limiting costs per units but again I feel there needs to be a way around this for upgrading units. Normally I would not care but the minute Civ went to a more promotion based system, you don't want to lose your older units and all their combat earned promotions. It should always be much cheaper to upgrade a unit than to build one.
My main feeling is prior to somewhere around the ACW era, wars should be quick. Historically taking over someone's country was rare. In fact, I like the Rebellion mod because it showed how often it can be easy to take land but holding it? Hold different issue. I've been to Afghanistan so I know first hand.

Of course the Rebellion has had some issues because if not tweaked properly you can't expand without your country constantly collapsing into Civil War. However it is very good at showing how hard it is to keep capture territory when your culture is low.
A possible fix (if it could be done) would be to take a page from one of my all time favorite games:
Sid Meier's Alpha Centauri. Prior to WW I tech or so, all units would be
tied to a city for the purposes of maintenance instead of a Civ wide pool. Bigger cities could afford to foot the bill for more units. However, when these units are killed there would be a

penalty which would help shorten wars on top of the general war weariness.
I mean the bulk of your military will be from your big cities and losing production to

is going to slow down the war effort which will make it more attractive to settle wars quickly. This would give another reason to use mercenaries: when they die no one cares.

So the war-mongering players need to focus on wealth to fund their mercs if they want to go conquering.
The fact that right around WW I military support was more of a country wide thing and not armies fielded from regional regiments (like pretty much pre-ACW era wars) would allow for more combat time which dove-tails nicely with the change in warfare to have a more "Total War" where entire countries fall.
I don't know if you have played Europa Universallis, but their diplomacy is such where when a war goes badly, the losing player will quickly make peace with concessions. Some Civ mods do this well others don't. However for the most part in wars that was the whole point: get in, win some good battles and then get concessions. Rare was it you took over the entire country.
I mean look at Europe. Prior to WW II it was rare for any country to be completely conquered by another and even then revolts later would make them free again.
Another quick thing about espionage: Potentially another way to have "combat" espionage mission in peacetime would be against cities or in a city ZOC where there is a higher % of the non-nation population. Thus if I took over city Calais from France, then France and other nations could do "combat" espionage missions until the % of my nationality exceeded 50%. This could then represent insurgents like what we see in Afghanistan and Iraq or in any conquered area. However, once the majority of the people flip then those groups die out.
In fact, rereading this made me think about how culture and combat would work with the above. A country which focuses on culture is vulnerable to attack because they don't have as many units. However a country which focuses on warfare will not be able to hold much territory form said high culture country because they would be assimilated. The Chinese used this strategy for thousands of years:
Go ahead take us over: inside a generation you will be Chinese!
So both paths are still viable. The culture producing Civs have to worry some of their cities are going to be taken over but often times they will "flip" back culturally unless the war-making countries make an effort to deal with it.
To counter this, the war-making countries could pay to garrison the cities to keep

down but if unit support costs are high then that Civ is going to be taking in the shorts in terms of gold...just like we are in Iraq & Afghanistan.