I too am curious about how governments will work in Empires. After all, won't switching to a Republic imply executing all your family members? I'm thinking maybe there will be some system whereby the family tree is replaced by something like the family tree for the Teutonic Order in Kingdoms, with the "family members" representing various offices of the state.

But certainly it should be possible to have female monarchs, indeed the game should have Queen Anne ascending to the British throne within 2 years of the start. I believe that by this time it was no longer the norm for rulers to lead their troops into battle, so I can't see any reason why this would be a problem.