What random_target has said is actually true, even though I didn't think so at first myself. But after a few games I realised a number of things.
1) The bonus from city level up is actually cumalitive. It's not simply an upgrade to the bonus percentage, the original level 1 20% bonus still remains and is combined with say a level 2 city 30% bonus for a total of 50%. This bonus cannot be changed once select and could be easly wasted. 2 goldmines in a city that has upgraded gold production on each level up can easly beat a city with 3 mines that has not taken repeated gold bonuses
2) Without a map resource such as a goldmine, ancient temple or forgotten libary, all the bonuses and additional buildings in the world don't mean anything. A city with 2 to 3 goldmines can be transformed into a money making machine if all city upgrades and money buildings are used in that city. A city with no goldmine, but a money exchanger (+1 gold -1 food) and lots of bonus buildings won't accomplish anything.
3) The 1 per faction + 1 per game limits on certain buildings means that those ones need to be placed in a city where you can exploit the usually very large bonus it will provide. So careful consideration and placement in a city that maxes out the bonus is important here.
4) The maximum tile limit of 50 actually does play an important role. To get a city to level 5 and max out it's bonuses I'd personally only place buildings relevent to the cities perticular purpose. When you get down to it all those 2x2 and tons of 1x1 buildings will devour the open tiles when you approch lev 5 or reach lev 5 itself.