Well, at least CIV III takes away the travel bonus behind enemy lines that made CIV II too easy...
I think it would be very easy to fix the problems in ways that would improve gameplay.
Rail transport should be city to city only, and take all your movement points. That way you can rush reinforcements in time to defend the next turn attack, but not move onto a railway, traverse half the globe, then drive into the jungle and attack on the same turn!
Willem's idea of rebasing ships is brilliant. It solves the cross globe speed issue, without messing up the combat models. It would make blockading strategically important and worthwhile.
I see these changes as adding realism AND making gameplay smoother.