Yes, towers should be buildable anywhere within your territory, and they should give a defensive bonus to units stationed in them. Other units should not be able to pass maybe in a one square radius around them. This will make it possible to build defenses at strategic locations.

How about a "tower builder pack" for units so that you can design a specific unit for this purpose, similar to pioneers?

I'd like to see Towers build-able outside the city limits (worker unit, anyone?) but I'd also like to see the addition of build-able fortresses (unique upgradable city hubs) that can be used for military defense and bonuses.

There were hints here and there in the early betas that the devs were considering things like watchtowers, walls, and forts outside of main settlements. I'm still hoping to see them too, but I suspect the current situation is related to the idea that Civ-style settler/engineer units (persistent work crews) are 'not fun.'

Watchtowers should just have their range increased a little bit (like two squares) when appropriate fort techs are unlocked. At only 10 gold a building, they should not be that overpowerd as the suggestiions would do to them.

That would be neat, especially if watch towers were the basic level for a series of rural fortifications: tower-> garrison camp-> wooden fort-> stone fort, something like that.

re-enter: city spam and teleport exploitation =/