I want the game to me more than just conquest and developing provinces. I mean developing for institutions is literally the meta and it basically unbalances the game. Remember the memes of Totonacs with 150 dev provinces?
Sure, but before the meta was to create weird snakes or island hopping to border a Western tech province as fast as possible in order to hit the magic button. Sure, the old Westernization system was more punishing to non-Western nations but you still had the problem that everyone had tech parity in the mid to late game and a player could get it way earlier by just cheesing.
The reason AI natives are winning a lot isn't institutions anyway. Native tribes can't actually spawn institutions and pay a massive premium for developing. It's federations combined with the generally oversized armies natives have. A large federation is easily capable of beating up a young colonial nation even with a huge tech disadvantage, and once they conquer colonial land they'll often get the institutions that way. It's more realistic in an alt-history sense but has unfortunate balance implications, especially since the AI isn't proactive in intervening on the part of its colonial nations.
It's actually easier than ever to conquer the natives if you do it actively though. If you have an army big enough to beat a federation, you can get massive amounts of land in a single war. Fight a few of those wars and the remaining natives will be extremely weak.
On a general note, there's always been a problem in EU4 where tech is ahistorically strong and rare in the early era and ahistorically weak and available in the late era. Some nerd discovering how to form a pike square shouldn't suddenly turn a late medieval army armed with pointy sticks into invincible space marines. Meanwhile, in the late game, when the disparity between "advanced" European nations and everyone else was historically most pronounced, it doesn't matter in game because everyone has all institutions anyway (or had Westernized, under the previous system).
I mean, native Americans actually were an existential threat to European colonies in the early stages of colonization, so it's not unrealistic for them to be so. It's just annoying to see it happen every game.