With smaller steps (not 9 or 16 population per 1st level city), morale management would get much easier. I think it would be healthy for the game to have at least one more level. Maybe +4/+9 for silics and +8/+16 for carbon and aquatic.

I'm currently testing a mod that adds Settlement, Town, Metropolis, and Megalopolis improvement types.  Instead of replacing the City they are in addition to it so that I don't have to update the game's ImprovementDefs.xml.  Settlement upgrades to the others with additional food or Durantium required.  The way I currently have it is that Settlement gives +4 population cap, Town an additional +4,  Metropolis +8, and Megalopolis +8, so that doing all the upgrades will get you +24 on a planet.

Over the weekend Brad has been making changes for a 2.3 release that may require me to take another look at these values.

This is what Brad said he'd done for cities, for the next patch (eta unknown, although he said this week):

City population cap reduced from 16 to 9.
City food cost increased from 2 to 3.
Cities provide +2 level bonuses to Research, Manufacturing, Wealth and Influence improvements!

So I can update my mod to add the level bonuses and rebalance the food costs, what do you think about the population caps?  Do 4, 8, 16, and 24 still seem good given that a City will soon provide 9 instead of 16?

I believe it's an adjacency bonus.  We'll have to wait to find out for sure.

Unfortunately, for those of us who like to play synthetic,  it seems like just another advantage for "flesh bags". 

OK, new mod up: http://www.nexusmods.com/galacticcivilizations3/mods/113/?

I may need to tweak it after the next patch comes out.  Also, I might add support for Financial Cities, Manufacturing Cites, etc. if people want them.