One thing that is important to note is that the limit for resources and cities are based on the closest tile with improvements. Thus the radius that city can affect is -not- circular and can be marginally bigger than would otherwise see.
A level 1 city with the 4 basic buildings (mat, gil, tech, arcane), will (assuming ZOC) connect to the following resource.
[C] [I] [I] [ ] [ ] [ ] [R]
Thus the bigger the city will ultimately be, the further away you can afford to put the city. I've been able to build a level 3 city that has grabbed all the resources that were ~6 tiles away in multiple directions. Using the same principle, I've built cities that have reached resources 10 tiles away in a single direction while still getting the nearby resources.
The main benefit is putting a lot of like resources into one city or grabbing single resources that don't modify well (a single farm does not benefit from irrigation). It's ultimately far cheaper as you also tend to not be spending as much money on buildings (among other things). While stopping monster spawns are nice, it's usually not a huge problem in the early game especially if you hire one or two champions. Monster problems only happen if you're rushing too fast - I've yet to have an issue with monsters even with 12+ cities (and still expanding) that are far more than 10 tiles apart. The monsters you worry about at later in the game... at which point your cities have grown enough to push them out. Especially if you have minor factions near by, their vision radius will also push monsters out.
Not to mention that having more champions brings you their benefits. The most important is that they artificially inflate your might rating; the game gives them more weight for military purposes. Thus by snagging champions like they're going out of business, I've been able to reach into mid-games with virtually no standard military while still having no monsters roaming around due to multiple stacks of champions (I generally end up with 3 to 6 stacks of multiple champions). All of whom are generally mid-level; due to stacking, I also eliminate the need for high level equipment. Later in the mid-game when units start to overpower champions, all that money I didn't spend on equipment for champions and hordes of units (and then some since I'm not supporting them financially either), I can use to immediately create unit stacks of high quality. And due to cleaning up wimpy monsters, I have enough of a surplus of gildar that I rarely want. When I do want, my surplus of other resources lets me borrow from others readily.
Also, as far as population, at the moment, you can 'store' population (if you have resources available). Since anytime you build something, it takes the resources right then, if you build, say, a pioneer, then queue up a bunch of cheap units, those population points will effectively be stored. Each turn, add more to the queue. Once your housing is done, you can cancel the queue to shoot them back into the city.
I really should grab some screenshots for the improvement thread.