Okay, MORE sensible than it is currently, begging for ceasefires and then attacking the same turn...
As for the AI's not talking to each other, I don't think anything could be done about that, but that really is the crux of the problem right there. If I'm destroying an enemy militarily, the diplomats should be scrambling to get me to stop, not demanding I become a protectorate... for instance, Paradox Games, which are sort of a similar grand strategy, (although executed VERY differently) seem to generally have a good AI, it really is too bad Creative Assembly/Activision fails so terribly at it...
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