I should be possible, I have not done it, I haven't been able to decompile the code into a readable format, but it should also be possible with some trial and error without decompiling, there is a quest that causes a new town to be built, You just need to isolate the series of commands that does so, alter the location, the bit of code saying the quest is completed and not to repeat it, and any other effects you want to change that you can figure out. Then run this bit of code however many times you want. This should be possible using some cheat engines. alternatively if you configure the code into human readable it should be simple to build in your own cities.
a bit late, but I am going to add my voice as well. as mentioned before put them crewmates in a school, but lifestock can't be left in storage they must be sold. Also if you have slaves they have to be freed or sold as well.
some of what you mentioned is allready in the game, though in a crude form.
• there are carravans of traders already and pirates (though no one attacks the carravans).
• the tech progresion goes through the diffrent zones of the map. and you are limited by the bandits until your strong enought to fight them off.
• if by "control the city's affairs" you mean the industries that can allready be done. Specificaly if you get the DLC you can direct buy the industries and if you own them all you can rename the town. also possible but involving a LOT more work you can; crash the town (https://caravaneer2.fandom.com/wiki/Guides_and_Other_Walkthroughs, Crashing A Rural Town), Adjust the base production using one of the earliest versions (water and petroleum wells, http://www.crazygames.com/game/caravaneer-2 uses V1.0.0), adjust the base production by supplying excess cash when crashing the town, sell back industries in the sizes you want them to be, and finaly adjust what the town will buy/pay for/and how much by carefuly adjusting wealth, population, and the town owned industries.