I don't know about you but if I enslave a city it has a larger population ie. I need to set taxes lower and also it seems to me that how much of town profit is taken away for your armies salaries depends on population so smaler pop smaler pay.
I don't realy know about this last one but in my games if I wanted to make a Economy powerhouse from a newly captured setelment, extermination is the way. I haven't spoted any problems with that plan.