1. The frontline mechanic - yes, it is really bad. I don't understad why Paradox doesn't allow setting a front line anywhere, as OP says. At least set a front line on my own borders. If I'm playing Soviet Union, and Germany, Romania and Hungary/Slovakia are all in the Axis, why can't I set a single front line over the entire border? Instead, I have to set three separate ones.
2. Following history - I feel that the game is good enough in that regard. It is also debatable whether the nukes were the straw that broke the camels back, or was it Soviet decision to DOW Japan and their conquest of Manchuria. Japanese cities were already bombed out. Fire bombing of Tokyo destroyed more of the city and killed more people than two atomic bombs combined and Japan didn't surrender. Everyone in Japan understood that they were defeated, it was just a matter of what was the best way to get concessions (most importantly, retaining the Emperor). Hawks hoped that inflicting significant casualties would make the allies agree to some concessions, while doves thought that agreeing to allied terms would placate them enough allow Emperor to remain head of state and head of Shinto religion. Hawks wanted Soviets to mediate. With Soviet invasion of Manchuria and total destruction of Kwantung army in less than a month, that hope vanished.
In truth, Japan was sending overtures and looking for a way to surrender even before bombs were dropped and Soviets entered the war. In this case, kudos to Paradox that they actually did their research properly, and an advice for the author of the OP to learn a little himself before criticizing others.
3. Capitulations and peace conferences need a lot of work, I agree.
4. Events and national foci - I'm generally pleased with events (more the merrier, but nothing disastrous there), while the national foci could use work indeed. Germany's barely winning against France and Czechoslovakia in 1938? Hey, let's DOW Poland and Benelux countries. That would be fun. We have just a few units looking at 200 angry Soviet divisions across the border? Let's attack anyway. It can cut a game short.
5. The AI - no qualms with OP there. AI is that stupid. Waiting for weeks before moving into empty provinces. Placing 200 divisions in the Balkans and suffering attrition while leaving a bridgehead undefended. The worst example I saw was the Soviet AI. They were losing heavily in 1944, ending with a concave front following the line Crimea-Caucasus-Urals-Arkhangelsk. They decided to counter attack in the north with troops from THE SOUTH. I've noticed something weird happening, tag switched to Soviets and saw 30 division in Crimea having attack orders close to Murmansk. Red arrows through 200 hundred provinces. Even if there were no enemies in between it would take them a year or so without strat redeployment. Additionally, absolutely no sense of preservation of equipment. Soviet Union builds 600 division with no equipment, leading to even faster losses.
All in all, some good points. My verdict is that HOI IV has good basis on which to build on. AI is the biggest issue by far. If it reaches acceptable level, it's gonna be a great game.