Perhaps a better name for those two hypothetical expansion would be:
-The Baltic Kingdoms: Denmark & Poland-Lithuania
-The Mediterranean Rulers: Italian city-states & Morocco
I also like the idea of an Italian faction aging up by adding city-states to the coalition like the US does with states. I think the capital should be in Turin, because they were more relevant in trade and regular politics and more consistently relevant throughout the whole time period of the game (Papal intrigues are hard to pin down as solely Italian affairs as they tended to range more into wider European power plays, plus an age up with Rome that provides bonuses centered around the church would be too super cool to pass up on).
-Their explorer should be a cardinal who can heal units, and can cast a sermon that halts enemy units in place for seven seconds (own units can move, but can’t attack either during the sermon, however the sermon does not affect assassins). The cardinal can’t attack directly, but can train assassins. He starts the game with two assassins.
I think an Italian faction should have royal guard Xbows, and a few unique cards to improve them (added range late game for instance), but no skirmishers. Also, they should be able to train better assassins than any other civ.
They should have no musketeers either. Instead they could have early access to two other units. An italian hand-cannoneer armed with a handgun for limited range attack with weak single attack but powerful splash effect (similar to an abus gun in attack animation, but more armored in appearance and with much higher range resist and also available in Age 2). They could also have halbs as their other Royal Guard unit, and perhaps also early access to them in Age 2. Also, they should have regular level pikemen.
The idea of them having mounted crossbows suggested in this thread as their other unique unit sounds fantastic, and they could get regular hussars so as to not stray away too much from the other European civs.
Their artillery should be made up of Culvs, horse artillery, mortars, Italian hand canonneers, and no falcs (no need to remove the organ gun from Portuguese exclusivity once a mass of Italian hand-gunners provide the same splash effect as an organ gun would).
Their navy could have access to frigates, caravels, monitors, and instead of galleons perhaps to a galleas, which would have the same firepower and resist of a galleon, but a smaller design that could compact more units in less space and more maneuverability than regular galleons.
Some crazy unique home city card ideas:
-a card allowing their xbows to garrison inside outposts or forts and attack from there.
-a card upgrading the church to a cathedral that makes the surrounding buildings 20% stronger due to advanced Italian engineering (would incentivize attackers to waste time taking down the church first during a siege).
-a card that improves assassins resistance vs mercs and their lethality against them and makes them cheaper.
-a card allowing assassins to be built at town centers and hired from the tavern
-a card increasing the movement speed of their boats.
-a card that creates an area of passive effect (similar to unction) around the cardinal that increases the gather rate of nearby villagers (age 4)
Some ideas for their age-ups:
-the Genoese Age Up: provides a single bank wagon + three xbows.
-The Rome Age Up: provides a second church wagon and from now on they can have two churches in the game + two halbs
-Venetian age up one dock wagon + 1 caravel
-Two Sicilies Age Up crates of gold + 2 assassins
-Florence Age up provides a factory wagon + 2 Italian hand-gunners (available age three onward only)(italians would only have one factory card option in their home city shipments, so they would still have a total of two max, but with the option of one in Age 3)
-Milan Age up an advanced arsenal + arsenal wagon + 2 culverins (available age three onward only)
Overall, they would be a fairly defensive civ with strong buildings, archaic looking units, a sleak and slippery navy, a strong economy, and easy access to both hire and kill off mercs (and hero units).