What I know is that its not very good or effective, its just simply better to focus all Universities in one state. Is this true? Are qualifications a University provides give literacy as well?
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No, universities do not provide literacy. It makes sense to concentrate them in the capital, if you want intelligentsia to be powerful (capital gives 2x more clout). Then, when you achieve max throughput bonus (30 levels at game start, then 50), start making them in other city. Second city is usually one with the best paper production possibility, sulfur and wood. I also build them in huge unincorporated states, where I cannot educate my people, but need them to work in more advanced production methods. Also, it makes sense to build them in barracks cities, since if you have low literacy, training officers is the biggest limiting factor in growing and restoring the army.
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Forgot about the decree. But still, they're too valuable to spend for big countries.
I build a couple in my most populated and developed states so I can get more qualifications.
My whole education is built on decrees. Especially effective for unrecognized dumb countries up to 55%.