best faction to turtle with?

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The one thing holding me back from starting any war right now is the total lack of intelligence. I have to get some agents moving around and see who has what and where. I know the HRE is isolated in Bologna but I really don't know how hard they'll fight to retake it (if at all) or if they would continue to attack me on principle. What I do know from the HRE is that they really can't afford to be in a full blast Italic war early..or the rest of the "empire" fractures. So I may become diplomatic with France and Denmark/Poland etc and just start a war with the HRE...and then we'll see where Milan stands on things.

I really would like to win the first papal election though. Do more churches built effect this- as in, a higher overall Christian population throughout your Kingdom raises your reputation with the Pope?

The AI in M2TW gets screwed up when a territory of their is isolated from others, especially if there is no sea connection between the main homeland, and the isolated settlement. Troops in the isolated settlement usually become very passive, as in Bologna. You might notice they'll just hole up in there and won't send any reinforcements. ( unless war is triggered with the faction that holds the settlement that separates the 2 meaning, Venice, you). If you get Bologna (by conquest or diplomacy), any troops in around Bologna will retreat back to their territory. This means they won't be gunning to get it back, but would rather take Venice 1st then Bologna . The AI likes their settlements "connected," and are probably be more willing to lose Bologna, as they can now "function" properly (no more issue of isolation). All in all this means the AI has lacking capabilities when handling separated territories (again, separated by sea does not count), though this is issue is diminished partly in certain mods. (I hope this explanation is not confusing)

Building churches may help you increase your rep with the Pope, but you do not get a chance to vote for your own cardinal unless he (or secretly she) is a top 3 Preferati. This means you need your cardinal to get a lot of piety via converting, purge heretics. As Venice this means, sending your cardinal into Byzantine lands early. He should be followed by priests, who are less likely to turn heretic, if accompanied by a cardinal. As a group, they'll convert quickly. Converting quickly means your priests gain piety quickly (Battler/Enemy/Purger of Heresy), and more likely to become cardinals if seats become available. More cardinals of your own means more votes for you, cause even if you have a preferati, he has to emerge the winner first, after a voting among the cardinal occurs, before he gets to sit in Rome