I do agree with you that diplomacy is way off in the TW games, although that comes with a shallow diplomacy system. You dont declare wars for a certain province or title like you do in CKII, you just declare war. Which I think is a failing of the TW system- war ambitions arent clearly stated for the AI, so while you really just wanted that one province, the AI is thinking that you are going for total annihilation, and as such, wont stop until either one of you is dead, even if you offer peace. For instance, in my current game, Im at war with two tiny Celtic tribes that I havent really gotten around to defeating yet, and even though I offer peace, they refuse, even though I have 7 armies and they have 1.

What I think needs to change is the diplomacy options when it comes to war. Not jut declaring war, but picking a specific reason why might be better when it comes to AI decisions. For instance, when you declare war, if there was an option that said "I am claiming such-and-such territory" or "I will kill you all," then maybe when you actually got that territory, depending on the characteristics of that faction (peaceful, warlike, etc) they would either sue for peace or do everything they can to take it back. And if you were going for total annihilation as you stated in your declaration of war, then they wouldnt accept peace unless they were winning or something because you made your intentions clear beforehand. As for allies of your enemies sticking to their guns, yeah, its another problem that I personally havent encountered, but I sympathize with.