He has a capitol way up north, why he passed up the gems spot I have no idea. I would get a settler onto that spot pronto or reload back 8 turns (4 turn autosave here) and settle those gems first.
That will probably incite Pachacuti to DoW which would seem to play right into your Mongol horde plans.
As far as the south location. I would think to settle the coast so harbor can replace the massive roads you need to trade route there.
Yes, the coastal location is probably better, for this reason and also because it's closer to the things you want (and contains stone for an extra happiness point). You forgo 1 silver but whatever.
1 SE of gems is yet a better spot, but only because you need horses to conquer. Otherwise, the two spots are about equal. I can totally understand why you went to the far location (to avoid an Incan DOW) but it might have been more optimal to settle there, build a monument to grab the horses, and rushbuy a few archers if they DOW. You're not at risk of the Incans settling the southern, mountainous location, so you can take it at your leisure.
Alternatively, put 1 city in the forest next to the warrior, another 2 SE of gems. Gets you literally every single resource around, but the lower city is vulnerable to attack.