Regarding some of your points:
Starting points - while I agree that map generation leaves a lot to be desired, the spacing of the players has been fairly decent in my experience. I don't know how you are running into 2 factions on turn 10 unless that is a gross exaggeration. Play on large map if you want more room - I don't know why you are even complaining about medium maps when you can just up the map size...
Scouts - those are there to explore, and yes they'll eventually die. They are expendable units that moves through rough environments (forests, hills, swamps) without difficulty, and if you use their movement carefully, it's actually rather easy to dance around monsters (by playing keep away and darting past once they chase you) to live long enough to explore quite a bit of the map. If you can do the same with your sovereign, you can certainly do it with scouts. You generally only die if you run into way too many monster groups at once. They are only wasteful because you aren't being careful with them, although you don't always need them (if you use heroes/pioneers to scout). Only Tarth's scout are worthless (because all their units have trailblazing by default - so it's only a +1 sight unit).
The monsters are strong if you just run up and try to stab them with your starting weapon, what you need is specific sovereign strategies built to deal with them. You can either be caster (using overland spells like pillar of flame or tremor), summoner (using the summons as fodder to weaken and distract them), buffed fighter (take procipinee's crown and buff yourself to kingdom come), commander (field a bunch of spearmen and stab everything), or a combination of all of those. Those are what is known to work, if you don't like those for some reason, come up with your own... if you want him to start with some armor, there's a gauntlet that you can give him. Still, whatever strategy you use, it would be wise to stay away from the drake until you think you can handle it. If you know you can't, then just play keep away, the same as scouts, stay one tile away from them at all times (buy a horse early, it'll make your life easier), and don't settle too close. The whole point of those harder monster is to guard those prime real estate spots on the map. They provide a challenge for you to overcome. If you kill them, you can then settle in those nice spot. If you move them away from those, then there wouldn't be any real point to having them around except to be exp.
Yes, the AI is expanding like crazy, but to be completely fair, that's a really effective strategy in the game as long as you can keep your empire from being stretched too thin (and outposts doesn't hurt at all). They are essentially doing what a player would be doing, putting outposts to stake resources anywhere they can get away with... and, if they can't, they'll fight for it. Because if they don't do that, they'll never be able to put up any semblance of a challenge. Also, there is no need to worry about that outpost and your nearby fireshard. Once your ZOC grows, it'll override the outpost's, so basically, he's just building it for you and getting a tiny bit of use out of it before you take it back. Heck, you should have build that outpost yourself, but since you won't, he will. If you think the AI outposts are bad, you should see what players do with Arcane Monoliths. As for the monster destroying AI stuff, they do raze AI stuff... just not always. There are some slightly buggy behaviors that are hopefully being fixed in the next patch.
Regarding AI aggressiveness, the AI will go to war based on a variety of factors: 1) Room to expand (if they are still settling, then they won't move to war, but if there isn't any where to settle, they need to expand by conquest), so play on larger maps to increase the time you get in the beginning to build up while they are settling. 2) Military strength (easier to beat someone who's weak), so try to keep your military up to par or everyone will jump you. 3) Relations (empire/kingdom bias, past actions, influence, treaties, etc), some of which you can influence (like setting up treaties early or build up some influence). No offense, but it just sounds like you are turtling too much...
Crits are also being addressed, but could use a second look in their overall implementation. Archer gear is neglected because for the longest time range attacks was very OP since the AI didn't know how to use/counter them. At least with spells, you have mana concerns, with archers it was just ran away and shoot... which still works a little too well.
