Sorry but it is not flawed design. This has been the nature of city design since the start of the Elemental series. The flaw is the AI not being capable of good city design or even placement after all this time. Currently, the AI is bad in both city and outpost placement as it unleashes hordes of high level monsters. Fortunately, for the AI, the monsters don't attack their cities very often or as the player you could just sit there and wait for the monsters to win for you. Though, I still get a giggle out of turn 2 announcements saying so and so civilization was destroyed (because of bad city placement).
You must have an enhanced city building version of the game because I can't snake my cities "ad infinitum". I have only so many structures that change the cities boundaries the rest are upgrades which have no effect. I do not see snaking as any sort of exploit when it was designed that way. As for "gaming the system" I've never understood that being a negative thing. It is human nature to manipulate the systems that surround us to achieve maximum benefit; it is not breaking the system it is simply making rules work for our benefit.
Sorry again, but it is willpower that stops you from doing something that you can but think is wrong . If you think snaking is wrong because it gives you an unfair advantage then it is wrong for you to do so just because you can. Actually, most of us play sub-optimally because were just not very good . Having said that there are plenty of 4x and wargamers & rpg players who play a game sub-optimally because it may be more fun or challenging to do so.
Having tried to respond to all your points what it really comes down is having fun since it is just a game. I find the current system fun and you obviously do not. I have no problem with changes as long as I can mod it back. I already plan on modding the way piers and lumbers yards work, if it is possible, as the current design makes no sense to me.
Cheers and if you live in the US have a good Thanksgiving