London was a major port, yes.
But was London a major port of the British navy, and could London have bee directly seized from the sea via a fleet sailing up the Thames and landing somewhere in the estuary just east of the city. That is what your map's rendering of London is saying.
Don't forget that province density in Paradox maps are as much a reflection of military questions as economic, and I would argue even more so. Why does Virginia in the USA have 7 provinces, making it one of the largest states in the US in Victoria, when it was NOT a major economic center of the USA? Becasue the state was a major battleground during the US Civil War, and the best way to reflect difficult fighting in the old EU2 map section is to have a lot of small provinces in an area that need to be conquered.
Why are there so many small provinces along the Austria-Ottoman border in Croatia? Croatia was not a major economic center of the Habsburg state, but the density of provinces is greater than around Vienna. Once again to reflect what would likely have been a long, drawn-out military battle had the border become an active warzone during this era, which remained a distinct possibility during the timeframe of the game.
It is this reason, and NOT economic, that explains the province density of the Rhineland and much of Western Germany. There are lots of provinces in the Rhineland, Belgium and NE France not because of the economic power of the region, but to make warfare in the region more difficult, especially once you start factoring in the impact of fortresses and the bonus defense gets during the course of the game. You can't have a war of trenches in a region with only a few large provinces, you can in a region with lots of smaller provinces. Strip down the region into provinces similar to the size you propose for S England, and the French will be steamrolling in to Berlin almost every game.
And when you consider how factories work in game, you can see clearly that provinces are NOT based on economic potential, particulary not for factories. Factories employ based on a state level of production, not province level. So it matters little if the POPs are amassed in one large provinces (Birmingham as a whole) or 2-3 smaller one as you propose. So long as the POPs are in the same state they will be employed in the same factories. If the size of the POPs is an issue, it is not difficult to split POPs in game, especially with Dietmar1982's POP splitting tool, and in fact the POP files I've created for Clio start with the largest POPs being 19K (except for 1 40K pop in provinces that can support it) to ensure maximum production of RGO goods from the start. And as Palisadoes says, if it is felt the production of the Black Country is not high enough, it is a simple thing to expand the base production value of the province as well.
Where I have the greatest concern with your proposals AofE, is with London in particular and the South in general is from a military perspective. No invader of Britain since the Anglo-Saxons, AFAIK, have used the Thames Estuary as a landing zone to being their conquest of Britain. Billy The Norman landed at Hastings, and Dutch William landed IIRC at Torbay, both on Britain's south coast and at least a few-days march from London. By the 19th C the nature of what would be required for a naval invasion of Britian would have made the Thames estuary ill-suited for a naval landing zone, and landings would have been made in more geographically favored zones, such as the south coast or perhaps Norfolk-Suffolk. This is the main reason I do not support London having direct access to the sea, it badly reflects the miltary potentials of the estuary as a region where successful landings of troops to immediately seize London could have taken place.
Re the south in General, again stripping provinces from the South to the North is the equivalent of saying that if there was a landing by hostile forces say near Southampton, the first real potential for defense would have been in the Midlands. Again, given the way the military system works in Victoria, do we really want it such that enemy forces landing in say Cornwall could reach London with the fall of just 2 provinces, as your map would allow? Thus if you want to have the South of England to be as militarily balanced as the North, there really does need to be more provinces in the region, especially to the west and southwest of London.