You have the right idea. Though I did not test the buildings stats much, I was able to create some nice results. I do not think you can "take away" the negative effects of being far from the capital, but you can sure add positives. I edited the executioners square and I was able to add a +125% bonus because of law. In the file I changed the number to "50" and in the building info screen in the game it said "250% law bonus", though the end result was only +125% in the settlement detail screen. One benfit of the increased law bonus was the elimination of corruption in that settlement. I think I am going to add some law bonuses to my Roman buildings next campaign to help with corruption in far-away provinces.

I have also edited the public health bonus on the sewers. It add a public health bonus and a population boom bonus (and my population grow when up to 12.5%). The increased public health did not help the squaler at all. If anything , I think it increased because of the population boom.

Those are all I have tried to edit and I have not played with those edited setting for more than a couple turns, so they will need further testing. But by editing these values you can make a super happy settlement. I tested increases in "law_bonus bonus 1" up to "law_bonus bonus 50", and it still worked, so the sky seems to be the limit. I tihnk editing these values will be good for people who dont want to worry about the happiness of their settlements.

hehe and dont listen the "Do not edit" warning, you can always change it back (but ALWAYS backup the txt files before you mess with them).