Unsuccesful diplomatic attempts usually result in losing charm. Save before attempting to use a princess for diplomatic purposes. Likewise successful diplomatic proposals will increase charm. You can also use the give_trait cheat for princess characters. I'm not sure yet what all the possible princess traits are, but "PrettyWoman" level 1-3 can turn her into a real beauty. Many people don't like to use cheats, but you can at least use this beauty cheat when marrying your heir to a foreign princess (yes, the cheat works on foreign princesses). This way you won't jump through hoops to marry a certain princess who looks good in the picture only to discover after the wedding she's really a wretch which will decrease your likelyhood of producing offspring.