Agree 100% with the OP. The current dynasty system is simply a way to get more champions.
There's no point in knowing who is in line to the throne if the heirs don't take over when the Sov dies. And I don't get why the 1st in line's son becomes 2nd in line, instead of the second born child?
Offsprings info cards are simply copied from the parent of the same gender. They even show the parent's name. If Rillis has a daughter, the daughters bio will be about Rillis. I'd rather show the daughter's actual name, since it's her card, and a 1 line bio that says "Blah is the daughter of Blah and Rillis, and is first in line to the throne of Blah." Maybe make it editable so we can do it ourselves, whatever, but at least get rid of the parent's bio from their offspring's cards.
Marrying them off should increase relations with the factions of their spouses. I think it does now, I'm not sure, but if it doesn't it should. And if war breaks out with those factions, then the spouses, maybe even with the heir they're married to and their offspring, could have a chance (different for each individual unit) of defecting to that faction.
If an heir does take over, then maybe some cities could rebel, requiring you to garrison troops there to restore order; or maybe cities near a rival faction's border could flip; if you have any children married to other factions, then said faction could gain some kind of influence in the event of you Sov's death, maybe some cities would flip to them or maybe the faction would even try to claim the empty throne for itself, thus causing war.