The idea of assimilating acquired territories was something that I really liked about Rise of Nations, so it’s fun to think about how something similar might work in AOE. Personally, I’d like a couple of options, each with its pros and cons. Razing buildings could grant a lot of plunder and guarantee damage against an opponent, allowing for hit and run strategies as a Mongolian player, for instance. On the other hand, capturing cities (or specific buildings?) intact could bring greater economic/strategic benefits, if one is able to maintain a prolonged military presence and resist any attempts to recapture the areas. With this distinction, you could even make razing buildings a function only served by specific raiding units that carry torches. This addition would circumvent the issue of having units with swords being able to take down buildings. Instead, most units would capture buildings in their vicinity by default, not attack them.
Based on the win conditions, though, it seems unlikely that capturing enemy bases will be an option. I think we will just have to destroy a set number of an opponent’s landmarks. If units are not capable of attacking stone walls, it might be the case that the city wall of your opponent remains usable after they are defeated, but that’s probably it. It does make me wonder what happens in team games, though. Once a player loses all of their landmarks, what happens to their remaining buildings and units? Maybe those could be given to the player that destroyed their last landmark?
As far as having more clearly defined towns goes, I’m hoping that the new trading mechanics will encourage players to expand and defend specific points on the map. The images we have seen of neutral markets (and, potentially, a neutral seaport) suggest to me that this might be the case. However, from the little I played of AOE3, I remember the trading posts in that game were also fixed locations, and I don’t remember the separate towns being particularly distinct. So, these locations may not be significant enough to affect how a player chooses to expand. Hard to say, but at least there is some potential for the type of growth you are talking about.