Good ideas you have. With the settings I use, the South has a fairly difficult time producing many building, doing research, and building any ships. I had one Blockade runner destroyed by the Union and am replacing it, and that is it so far for the Confed Naval apect.
Someone mentioned that they didn't think that horses should be available through the blockade, I agree. Replace the horses with weapons, supplies, money, and technological research points.
I agree with you that the numbers in the armies are a bit too high, unrealistic, and so are the casualties and the govenors' demands.
A small and weak Southern navy at the beginning of the game would be OK, but it would have to be stationed in Memphis or New Orleans, and the number of ships representing an ironclad Flotilla should be maybe 2 or 3 for the Union, thereby giving a reduced building cost and time, and effectiveness. Even the wooden Gunboat and Ship flotillas could have the number of ships they represent reduced to 5 rather than 10, but 10 is OK, and maybe 7 would be better, and the time and cost to build could be reduced.
I haven't played the Union yet, but what you say about the lack of ability to build both respectable Army and naval forces I agree with. he Union should be able to do both, not overwhelmingly at first, but after 1-year, the Union should be able to build and maintain a Navy along with an Army.
In the early and mid years, the Confeds should have an abundance of supplies coming in through the Blockade, tapering ooff but still significant as time moves on. This is a hard aspect to put in a game, as is the economic system. Battlefield captures of weapons, ordnance and supplies were very important to the Confeds, and this aspect seems to be somewhat represented OK, maybe some tweaking could be done, but I don't know because I haven't played the game enough.
The Confed economy put out a steady stream of weapons, ordnance and suppies but it was as you point out rather limited compared to the Union. Two things the Confeds produced in very respectable amounts was clothing and Arty. pieces. The ragged Confeds were not always ragged, and became ragged while actively campaigning, as did the Union troops. The Confed soldier was generally fairly well suppied with clothing. It was either before or after Chickamagua that the Govenor of NC sent enough uniforms to equip Longstreet's Corps. NC alone had an abundance of uniforms on hand, even at the end of the war. Even the Confed Army in the late war Carolina Campaign was well supplied with clothing. It took a while for the Confed economy to sort itself out, but it did OK. transporting the materials to the Confed military was perhaps the bigger problem. Overall it was a mildly sufficient production when coupled with what came in through the blockade, barely sufficient at times and more than sufficient at other times, and a big problem was transporting the necessities to the troops as the Confed RR sysytem was hard to maintain, and animal drawn wagon production was limited.
If the Confeds had access to more steam engines and RR equipment then this would have made a big difference in some matters.
I set both the presidents power settings to 0 when I have been playing, as I don't know the game well enough to determine if any advantage or disadvantage should be set, but when playing the Confeds with these settings it seems somewhat historical.