How formalized were the actual wars, fighting, treaties and such at the time? Maybe this thought would be more outside the larger actual capital-C Crusades, but part of me wonders whether Christian-Muslim relations couldn't be better simulated by something like how the Treaty of Tordesillas lands worked in EU2. That set aside segments of the world where Spain/Portugal would just always be hostile to other Catholics, and could absorb provinces without a war after sieging them down. "No peace beyond the line," basically.
Maybe something where instead of having a formal war against specific participants, an Crusade could designate a target area and right-religion troops can then freely siege down wrong-religion holdings within it (maybe only if they formally join the Crusade?), with some kind of mechanic to create one or multiple states if enough are taken and held. Could cause automatic hostilities between troops of participants and wrong religion realms with holdings in the area as well, regardless of location. Maybe instead of traditional warscore you'd use the same mechanics to reduce time needed to retain holdings to create crusader states, with some kind of reverse for defenders to make the crusade eventually just die out.
This could also open up more flexiblity for implementing things like the Fourth Crusade, because then it's just a matter of switching target location/religion instead of changing who the war is against.