Point of fact, the research for each level is 1, 2, 4, 8, 16. Of course that is not really the bonus we are looking for from city level. We want better city specialization, not better research.
So they buffed the bonus slightly in .952? Nice, but not even close to enough.
I would think, that one of the important factors here would be to make grain matter. Maybe making it a multiplier for research, production, taxes, etc etc.
So a city of 500 population would have maybe 2.5 or 5 times the value for each 1 research and production (maybe that's too powerful). But that's the idea, so a city of 5,1,2 could effectively reach a considerably more valuable state than it does currently, also it would make it more realistic for a city like 0,5,3. would only be slightly more valuable production wise than a 5,1,2 city, but it would product much less research and much less taxes.
In previous versions (0.92 and before) the population gave 0.1 production and research per person, so a 100 pop (level 2 city) had 10 bonus research and production.
Grain only matters in as much as city levels matter. Since city levels don't currently do enough, Grain doesn't do enough. Since we are apparently sticking with city level as the main benefit of population, it would be untoward to see any new game mechanics that don't follow this design goal. If you want to add multipliers to resources, they must come from city level. It's too late to turn back now.
It doesn't matter if the bonuses comes from the amount of people in the city or the level up process, but they need to come from somewhere in order for it to matter.
I would just like to point out that in the current balance, basing city progression on level-up is flawed. As many people stated, bringing a 3 grain city (which is quite low compared to most locations) to level 5 is not very hard. Assuming the game drags to late game, most of your cities will be level 5, and have enough population for level 6 and 7 were they implemented. Thus I believe that the population should be the base, and level up be a nice bonus (say, extra 20% to the population bonuses per level and a unique building).