So it means that each of the unique settlements would need to be huge city from the very beginning? Well, this is a problem for most, but Constantinople, Baghdad, Cairo, Cordoba, maybe Fes, maybe Palermo (but not really, iirc I've included a link to an article discussion this issue in the Sicily historical thread). The great cities of Jerusalem, Venice, Florence, Paris, London, Kiev and other - these were not huge cities on 12th century. What's more, building them up and then upgrading is part of the gameplay.
On the other hand, this would not be a problem in the SSHIP - we would simply disable upgrading all the cities to the level above 4 (ie large city becoming huge city).
Not much, they are mostly the same.