Well, to effectively supress the natives without killing them, try using leaders (not conquistadors) who have high firepower and low shock ratings: they'll break the native low morale in the fire phase - which kills few - and bypass the heavy-casualty shock phase.
That'll keep them in line until they're absorbed (and you will need few troops).
Note that, as a Portuguese player, my priority in the early game is always to get to India, pronto (this is extra important in multiplayer), and your few troops will be needed there, not to rot away in Africa. So, you'll better find unoccupied areas (historically, Fernando Pó isle, Table province and Mombassa) for ports and use them on your way to the indian riches.
Btw, if you're wondering how we did it in real life, here's our little secret: the 'prazo' technique.
(more rarely - like the Angolas - we made an alliance with the tribes and christianized them after saving the guys from an enemy tribe; but this was sporadic).
Basically, what we did was to set up an outpost on the coast and sent one guy inland for each tribe we knew. Sure enough, they always become kings of the blacks and then ruled them alone, swearing loyalty to our king and submitting 'hostile' tribes.
We provided them with white wives, so the local black tribes always had full-blood portuguese kings.
In fact, besides the 500-odd people in the main colony, the whole territories of Angola and Mozambique were ruled by about 20 white colonists right up the middle of the XIXth century
Regards,
Keoland
