I'm considering taking this out of retirement and working on it again....
It'll give me something else to work on in Photoshop, at least. And I've learned a few new tricks
For the village/starting position problem, I think it would work to instead of having the one super-village, I would have multiple clusters of 5-7 territories each spread throughout the map.
A bunch of mini-villages instead of one big one.
I am still strongly against adding more impassables. Instead of impassables, the long distances between villages would help slow the game down and make the fighting less about conquering and controlling land. More about travelling from place to place, since you would have little chance of being able to defend everything you own.