I'll tip my hat into the ring here too. Initially I was all for dynastic issues. Yet, really they should pretty much be between claimants with better claims to the throne, good claims to the throne, or claims + a lot of damn power, as it stands. You often get a rebellious cousin with no hope of winning freedom or your crown.. and usually you need him to get someone preggers and then leave him in jail.
The decisions that the AI need to take before rebelling need to have much higher benchmarks. Don't get rid of them by all means, but make each one more significant by making the requirements to war higher. For example, a brother that absolutely loves his other brother, should never go to war. It does happen.
Family rivalry wasn't ALL "Oh brother, please turn so I can stick a knife in your back" There was a lot of it, but not nearly as much as this game would lead us to imagine.
Gameplay wise, I can usually manage a lot of the technicalities.. but even when I keep my court happy, the bastards still plot against me, thereby going to war.
Yes, the more distant the relatives the less likely the conflict, but pretty much anyone with my family name is my biggest enemy in any given game. (I warn you about putting dynasty members on the top of other thrones without careful consideration, I, the Emperor of Wales (rise of empire mod - Wales/England/France/North Spain/Scotland/Ireland)), often had to fight the combined strength of Byzantium and the Holy Roman Empire because of family members in charge of them. Also when internal family members rebel, they can drag in those external ones easily too). Which is how my Empire of Wales fell, when my great-cousin the King of Scotland rebelled, and the two Romes attacked me.. I lost lots of territory and it starting a rolling cycle into destruction)
(Which to be fair, I then played through as another dynasty entirely, without the pre-existing penalties of my old dynasty, I was able to recreate a new europe. Was actually a lot of fun)