- TATW restricted the highest settlement level to one preplaced per faction (non upgradeable) to be able to use custom models for it.
- There is no problem at game start to assign an arbitrary population number to a settlement, worst that happens is an non fatal error messages (at least in M2TW if the number is higher then the official level - let's try to avoid that)
- settlement levels are based on the core_building, never seen more then the default (6). Seeing that the level names (large_town etc) are in the executable I am tending to assume that it is 'hard coded' - there is even an 'invalid_level' warning in there.
- razing: I guess you are referring to the standard occupation option, not the horde's grab&run option? That could be scripted to randomly destroy wall sections (if the commands work in RTW) but the scripting would be extensive. One monitor per settlement and roughly 20 lines per monitor.
Note: I am not familiar with the RTW scripting limits as I have never worked with RTW scripts, on top of that in M2TW the campaign_script is automatically called and therefore hasn't got the all the trigger issues that come with a show_me script. Any scripting suggestions\comments is based on my M2TW experience and will require testing.