Rass,
I have no doubt of the power of close city placement. I just choose not to do it. I don't like it.
There are many compelling reasons, such as those you posted, for doing it your way. There are few for doing it my way, but this is a case where personal preference trumps cold, calculated strategy.
-Arrian


The main complaint is that you will not get enough territory quickly enough. Land is more important than growth in the score. So, here is how you compensate. Make 3 or 4 core cities first, while your warriors/scouts scout. Then, place your next cities near the AI border. This won't work in MP because they would be attacked, but the computer doesn't really have a clue 
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. Each city gets 9-11 tiles to work. That means, with railroads and irrigated plains I get enough size 13+ cities for the Battlefield medicine, and the others, well, just don't grow above, say, 11 or 12. I also care less about medieval wonders. If I get 2, it's good, if 3, it's wonderful. They aren't sooo powerful. The happiness wonders are good, but if my cities don't grow so big, I just don't need them. I better care to build up my economy this time. But I respect and understand Arrians perfectionist style. I played once similar... till I saw, that cold calculated strategy also has its benefits 



The +1 commerce kicks in for size 13+ only. If you pack your cities that close, it's not worth even building a hospital to get to that size.
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