*personally*
I would like to see multi-tile cities but kept in terms of "districts".
I want to look at a city and be able to instantly tell how advanced it is in different areas even if it means the city is using 3 or 4 tiles.
I don't really have a problem with having limited amount of districts instead of "buildings" on the map, if the end result is still somewhat similar. Although IMO, the districts need to do something more than just be some visual cue for the city (they can be, but that shouldn't be their only purpose).
I'm gonna go on a limb here and toss out some ideas on how districts could be reworked into the current system with some minor changes:
Let's start with the basics, let's say a district is one fourth of a tile. Every city starts with 1 district, and gains the city level's amount of districts when it levels. So a lv 1 hamlet would have a max of 2 districts, a lv 2 village would have 4, lv 3 town would have 7, lv 4 city would have 11, and lv 5 metropolis would have 16. So basically the biggest city in the game would span a total of 5 tiles (if spaced that way, but may spread more naturally if desired), which SHOULD drastically reduce any performance issues (most cities would be about 3-4 tiles). This would also limit the snaking and gaminess of the system, while still allowing it to a certain decree so that you could defend choke points or grab nearby resources. All this is done pretty easily with tile limit in the current system, you'd just need a separate screen for improvements (that will no longer shows up on the map). Although it might be a good idea to give districts it's own build queue (to emulate natural growth), you could just assign the district like a city planner and the district would grow organically over time (let's say 4 seasons per district).
Now, before we go into how to make the system interesting, let's define some very obvious types of districts:
1. Civilian - Influences Growth and Population Limit. Let's say a normal city only grows to lv3 normally, and you'd need some Civillian districts to grow further. You can always build more to grow the city faster, or to increase the population to be taxed.
2. Military - Improves ATK/DEF of Trained units, lowers their training time, and city defenses.
3. Magic - Improves Magic value (Int? Not sure with stat changes) of units (to train magic units), and Magic resist of trained units. Provides magic defense to the city against overland spells (a resist chance?) and for defenders.
4. Industrial - Improves City Production
5. Commerce - Produces small amount of Gildar and increases amount of tax raised.
6. Science - Improves Research
Each type of district has 5 levels(I-V), with higher levels requiring the previous level along with the city of the same level. So a Civilian V district would require Civilian IV + a 5th level Metropolis. By having 5 of each type, you can make thematic looking cities without it looking like copy/pasted buildings (thus avoiding the repetitiveness of the housing issue in EWOM).
I hope you can see where I'm going with this. With 30 districts to build, and only a max of 16 that can be build in a city, you force the player to make some hard choices about their cities, which naturally leads to specialized cities. A player might want Industrial/Military cities to produce higher quality units faster, or some Civilian/Commerce cities to pay their armies, etc... all the while making a few high level cities valuable and competitive with city spamming.
This system can also be a flexible counter strategy mechanic simply by allowing the player to redistrict their cities to deal with problems/demand. Maybe you are having a lot of trouble with enemy mages, so you scrap some Civilian districts to build a few Magic districts in your troop production cities. The city would grow slower (or not at all) and produce less tax (less people to be taxed), but now the troops you train from there have better magic resists. All this would just take a few seasons for the new districts to grow (and maybe a flat demolition/districting fee). Or perhaps you are in the red on your ledger and needs money... it might be time to replace some districts with Commercial ones on your populous cities. Basically, districts would be city mods that you can put on/pull off to suit the situation.
To spice things up a little further make wonders and special buildings take up a district (you want those things out on the map anyways). Suddenly you have to make some real choices on whether you want to build that wonder in your best cities (but reducing the city's potential in the process), or maybe put it in a less important city... thus making those also important, or perhaps not at all if you don't really need it. Need more room to build? That neighboring city looks ripe.
If that wasn't enough, toss in some special districts, like:
Gilden, who needs lots of metal for their armies, might have a special mining district that generates a small amount of Iron, that they can only build into mountains. Thus, a Gilden player might value mountains way more than most, and might want to build special mining cities against mountains to support the construction of their armies.
Tarth might have special forest preserves that gives them bonus food and gives bonuses to their archers. Of course, these can only build on forest tiles, so a Tarth players would value large forests and would look for it to build their cities.
So now when you fight a Gilden player, you might want to go after their mines to disrupt their heavy troop production, or, if you were a creative magi, maybe toss a lower land spell on that mountain before the war starts and watch Gilden falls before your armies. Just the same, a Gilden player might want to take some Earth Magic to raise some mountains in a safe corner to mine without having to worry about defending it too much. The same can be just as true for Tarth and forest tiles, not only does it serve to slow their enemies, but it strengthen them in the process... yet a little brush fire never seems so dangerous... perhaps they might want to be on good terms with that Fire mage next door, or pick up some water spells just in case. Now you have some real strategy playing with elements on the map, not to mention some serious creative usage of terraforming spells that would otherwise be neglected for the always trusty fireball.
Not only would something like this address some of the fundamental problems that the current system poses, but it also make the game more interesting as opposed to just cutting out one of the games defining feature. Best of all, this is completely within the realm of possibility with only some slight modifications to the current system (moving individual improvement/buildings into a separate window), and this is just me throwing some ideas together. I'm sure that if you guys wanted to, you could make something way better out of it. That's exactly why it's so disheartening for me, and I suspect many others, when I see you talk about just throwing it all away for a 1-tile system.
Edit: Wow, that was way longer than I thought, apologies for the book.