At first I would like to mention some things that I didn't like and how I managed or suggest to overcome.
I don't like to start in poor location with low Grain/Production/Essence and need to press Ctrl+N many times
I edited tiles for all resources that they all give at least some essence and made maximum number of tiles 10 instead of 9. Now I often have 4/3/3 tiles almost in every start. This also benefits AI greatly because they can't Ctrl+N and have better settling conditions in future. Important note: essence should not be too high or a player may enchant his city and build too strong units.
I don't like peaceful AI
It's very easy to set non-aggression pacts and treaties. But its possible to edit these costs. If non-aggression pact costs 50 instead of 5 and requires Friendly relations instead of Neutral then this is somewhat harder for human player. More, you can edit relations. Make "You are of opposing alignment" give -10 to relations and here you are facing war with AI.
AI armies are pathetic
Units are really very expensive, but human player builds only one army which beats all and AI can't build such an army. So it's better for AI if units were cheaper. At Expert difficulty level AI units get a banch of additional traits. Lets create a new trait and call it "Patriot" (in fact this is AI-only-patriot))) with gives -200 to labour cost, -100 unrest in all cities, +1production and some combat bonuses. Thus we have all AI's with extremly cheap units, no unrest (AI can't properly handle unrest himself), and increased production.
I don't like the idea to give AI any research bonuses but I like to face hordes of AIs and here they are.
I don't like scare resources
It's easy to mod by increasing their rarity and MinPerFaction value, so it possible to ensure that all players have all needed resourses near to their starting location.
AI still uses foot soldiers without mounts
There are several prefences and its possible to mod for all of them special love of mount units. So we have all AI horse lovers.
I don't like poorly equipped heroes
It's too obvious to give them some rarities, but it's also good to give more chances for these rarities to be found as treasures. Also decrease chances for less useless trinkets. Give more chances for exclusive weapons and especially armor and give less chances for items. This also benefits AI.
Thankfully the game allows to mod many things and change balance to our liking.
Which things do you think may improve gameplay?
I suggest to exchange ideas and results of their testing. As for me, I continue modding and didn't try my settings through the whole of the game, I just tested for 1-10 turns.
What changes may help to improve AI?
Finally I made the mod - Patchwork mod. https://forums.elementalgame.com/450250/page/1/ It is designed to make the game more challenging and comfortable. No need to reload, everything is in you hands. Please let me know what features of the game are needed to be improved.