On Infamy and Coalitions:
The rule to gather infamy and to reduce it over time is simple and bad. The rule of 25% = Worldwide coalition is even worse.
First draft for scaling infamy limits:
25%: Coalitions start to form, if there are rulers, that especially fear you (Small ones, that you have just stolen land from or that are similar in culture and religion to ones you have just annexed). Rulers of similar religious group and region might join those coalitions, depending on how much they fear or hate you.
50%: Rulers may be in 2 different coalitions against you. If two coalitions share most of their members, they merge.
75%: Coalitions may start to merge, even if they hate each other, as long as they (as a whole) still fear you
90%: Napoleon threshold: All your neighbors and all their neighbors of similar religion or culture group and everybody else that fears you, joins one big coalition against you (basically as 25% now.

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Fear: Since I'm using the word fear a lot: That would be a function of infamy, relative strength, proximity and cassus beli. It determines how strongly the AI reacts to your infamy level.
If you are aggressive (high infamy), huge, nearby and have an invasion cassus beli against someone, that one will seek safety in numbers.
On the other hand even if you have been similarly aggressive in the recent past but you still are a relatively small, distant, Jain realm, people will see no reason to join a coalition against you.
With size playing this way into the balance, it should no longer be needed to factor size in when calculating infamy gain from conquest. However, county Infrastructure (Conquest of Finmark should not hit you with the same infamy as conquest of Paris or Rome. Number of baronies (build and, to a lesser extend, empty) should count.) and cassus beli could count. 5% for an average province in average situations sounds fine.
And finally reduction:
I do not think this should be a flat number based on size, simply for the rule of fun: It is not fun to wait 30 years after each holy war. I think 4% per year for everybody should be good measure but I'd like it to be more progressive with keeping peace: It could start at 0.25% per month but if you keep peace for more then 2 years, the speed of reduction could significantly increase. This would have the effect that even after a big "Claim on Kingdom" or "Invasion" war, you could at some point in the foreseeable future return to war. Basically 10 years of peace should always bring you from 100% to below 25%.
I did not factor size in here either but some distinction between simple "big kingdom" and "all-consuming Moloch of an empire" would be nice, so There could be some hamper for the really big ones. Also it seams logical, that while some guarded half-trust (low infamy) can be achieved with keeping peace for a while, true and honest trust (no infamy) takes a while longer. Combining those two points I would add a diminished infamy reduction when the infamy approaches zero (even surpassing the growing factor for keeping the peace) Huge realm would have a higher threshold, when this starts. The effect of this would be, that huge empires could still kind of expand at the same speed as smaller realms but they would have to do so at a higher level of infamy, meaning that instead of attacking small neighbors alone, they would have to attack bigger neighbors (who do not join a coalition at 25% because they are not that fearful) or small coalitions of small states.