Cities grow far more rapidly when you have less of them - Prestige is a bonus growth value, divided equally amongst all your cities

That's good to hear, I will admit I haven't had a chance to play the game enough to grasp all the nuances.

From your experience, does it seem like this is enough of a penalty for lots of cities to discourage city spamming and make the "few huge cities" strategy viable?

I would love to see outposts be upgradable and have their own build paths. I think there was another post here about that, but I couldn't find it. After playing a much longer game where I used a lot of outposts, I'd like if they had a bit more life to them.

For the record, Civilization (I think civ3) had outpost, for precisely this purpose - to let you use resources without the need to build cities. Later installations scrapped the concept.

That said, I like them too. I did not pay close attention to my pioneer first time I played and accidentally founded an outpost instead of my first city, and then waited forever for it to grow to a city I thought the concept was similar to MoM, where newly founded cities has an outpost phase.

Building them, however, should be cheaper than building a city.