quite interesting debate, but I will post here my opinions.
"Same cultural group" is actually paradox being lazy to balance east asia, yet still want to give Korea/Japan a nice time expanding other than having to suffer from the heavy tax penalty which would completely discourage expansions.
Imagine Korea annexing a few Japanese/Manchu/Chinese provinces, oh! confucianism -50% tax, and wrong culture -30%, hardly any is left. That can't be fun and realistic (their culture is quite similar for such penalty).
Unless they rework the whole east asia I still think they being in the same cultural group isn't a really bad idea.
Historically, east asian nations are way more powerful than they are in EUIII. They are able to field hundreds of thousands of men at ease.(even Korea/Japan could do so!), just look at the men fighting in one rebellion in Qing China, the numbers involved is simply insane.
http://en.wikipedia.org/wiki/Revolt_of_the_Three_Feudatories
a way to make playing China more difficult is perhaps to greatly increase their number of province and base tax, which makes a MASSIVE rebellion much more likely (say, 500+ regiments uprisings if the population is really unhappy or high WE) and makes it extremely difficult for western powers to take over China/Japan/Korea, IRL it's almost impossible to suppress the revolts without a huge army. A further tech nerf is needed if this is the case, and it'd similate that it's unfavourable for those powers to expand. A few more potential "rebel states" would be nice to simulate that everyone wants to takeover China.
Maybe Qing declined in the 19th century, yet the brits still have tough time in opium war until Qing decided to dismiss Lin Zexu
http://en.wikipedia.org/wiki/Lin_Zexu
The east asians aren't really interested in attacking the relatively poor countries around them because it's costly and not profitable. I think this is to some extent simulated by the -50% tax penalty.
Also, one thing missing in EUIII is that the manchus NEVER managed to take over China/Japanese civil wars , again I think it'd be very nice if we had an expansion/mod about it. The Manchus also "westernized" in some sense that they imported cannons from the Portuguese and they really fielded a HUGE army to defeat Ming/Ming Rebels. It'd be neat to give the manchus some nice decisions/missions to help them do better.