In my case I was also frustrated when playing civ1 and civ2 because there were so many absurd things that it was hard to imagine you were playing a civ's ruler. My conclusion about Microprose civ games is they're only war games with a civ "look". In MPS games you are driven to care only about how fast you can produce military units to crash the other civs. Although this can be cool for a lot of people, we must be honest and recognize they're not games about civilizations, but about war alone. If you want a game where you can know more about how your people is living or things like that, then you need a game about civs, not about war.
I've been dreaming for years about a game truly intended to let you play civilizations, where war is just one more element in it. When I found Clash I felt it was it. I joined the team mostly because I saw the chance to put in it elements different from warfare, specially social stuff. I've also seen in most model developers a special care in historic accuracy, which I find extremely important for the game to make it feel closer to real civilizations.
IMO the only way to make a game able to simulate civilizations and give the player the sensations you're looking for is building models where the complexity of real civs is included some way or another. The specific idea of a newspaper or anything similar can work only if you have the info to feed it, which in time comes from the models, so the bottom line is models. The newspaper idea can be generalized to any form of interface where the player is allowed to browse his civ and know more about it in any detail level he choses. I support it a 100%, but we first need to create the models that will feed these interfaces whatever they will be. My suggestion for you would be to think about what you'd like to see in that newspaper or what other elements you hope to see in Clash that can make you feel more like ruling an empire. Doing that we can get a better idea of what models need to do.