Yeah, it doesn't work with Italy in because it means Italian doges can vote, and then a doge will at some point be elected Emperor and it turns the HRE open elective -- at that point, the whole system is f'd for the rest of the game.
I agree with Olaus, though. I much preferred a larger Germany, though I quite like having Lotharingia as its totally historical and later Burgundian dukes attempted to resurrect it. I don't like Bavaria, though, and I can't really see how it would ever have been accepted as a proper kingdom within the HRE.
I don't like Rus being split into Rus and Ruthenia, either. Very odd move.