PS. After reading through comments and thinking about it more, I have a better guess as to how location density will be an advantage vs. disadvantage.
Early Game: I think that in the early game low location density will be stronger. Population is overall much lower in the early game, so having low density will lead you to having more of the scarce high pop locations. Control is much more difficult to come by in the early game, and as I identified that lower density makes control propagation easier, this makes low density stronger earlier on. Levies are seemingly only important early game, and your levy size isn't dependent on having many buildings with flat manpower bonuses in many different locations.
Mid-Late Game: Higher location density will be stronger. As nations and economies develop, especially the player's, population capacity becomes more of a constraint (an assumption). Regions with low location density will have locations hitting the soft caps on their growth curves earlier on, while high location density regions can continue to grow. Locations from low location density areas may also start hitting caps on things like industry size/level. Manpower becomes much more important with professional armies, and for a given total population, you can seemingly have more manpower with more provinces.
How to fix this: I think certain things need to have a way to scale with the actual size of locations or the total population of a given location.
1) Population Cap: This should in some way scale with the actual size of the location. If both a Chinese and a European location are flatland/farmland, and the Chinese location is twice as large, this needs to be reflected in the population capacity of that location. Additional, maybe less-than-linear, modifier to pop cap based on the size of locations.
2) Manpower Buildings: Needs a way to make manpower be more relative to the population of the province. No more flat manpower modifier that greatly advantages high location density regions. There are many ways this could be accomplished.
3) Cabinet Actions: Scale the time for actions with the population the action is performed on. Doesn't necessarily need to scale linearly. Could also scale with province actual size.
4) Forts: Not as significant with the others, but some scaling of the fort cost/maintenance with the actual size of the location. You shouldn't get extra coverage of your population and such just because the location happens to be larger.
Early Game: I think that in the early game low location density will be stronger. Population is overall much lower in the early game, so having low density will lead you to having more of the scarce high pop locations. Control is much more difficult to come by in the early game, and as I identified that lower density makes control propagation easier, this makes low density stronger earlier on. Levies are seemingly only important early game, and your levy size isn't dependent on having many buildings with flat manpower bonuses in many different locations.
Mid-Late Game: Higher location density will be stronger. As nations and economies develop, especially the player's, population capacity becomes more of a constraint (an assumption). Regions with low location density will have locations hitting the soft caps on their growth curves earlier on, while high location density regions can continue to grow. Locations from low location density areas may also start hitting caps on things like industry size/level. Manpower becomes much more important with professional armies, and for a given total population, you can seemingly have more manpower with more provinces.
How to fix this: I think certain things need to have a way to scale with the actual size of locations or the total population of a given location.
1) Population Cap: This should in some way scale with the actual size of the location. If both a Chinese and a European location are flatland/farmland, and the Chinese location is twice as large, this needs to be reflected in the population capacity of that location. Additional, maybe less-than-linear, modifier to pop cap based on the size of locations.
2) Manpower Buildings: Needs a way to make manpower be more relative to the population of the province. No more flat manpower modifier that greatly advantages high location density regions. There are many ways this could be accomplished.
3) Cabinet Actions: Scale the time for actions with the population the action is performed on. Doesn't necessarily need to scale linearly. Could also scale with province actual size.
4) Forts: Not as significant with the others, but some scaling of the fort cost/maintenance with the actual size of the location. You shouldn't get extra coverage of your population and such just because the location happens to be larger.
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