Is it even possible to have a map projection that has Sri Lanka, Somalia, and Korea without having Indochina? Or are you saying to merely include it as a wasteland? Would sea travel between Korea and Egypt be possible in-game or would they be separate unconnected bodies of water the Mediterranean sea and Indian ocean currently in game. Anyways the argument about including china and not including japan is paper-thin. adding china already has very little to offer in terms of adding to gameplay, adding it would merely draw peoples attention further east when, the game is supposed to be mostly about Rome. Though if you added China and korea, there's no reason not to add japan, even though it would add very little, because that's already the case with adding china. Another bad thing about adding china is that they would have to expand the steppe lands to include tarim basin and mongolia as well as expand the pontic steppe a bit farther north. It's likely the whole map projection would have to be adjusted to prevented either europe or china from looking ridiculous.
Having it entirely as a wasteland would the idea, yeah. Like I said Indochina, especially the hellish interior but also the coast, was only populated by scattered Austroasiatic and Austronesian tribes. It simply wouldn't need to be anything more than a wasteland.
Sea travel could be possible since one of the earliest references to Indochina was through
Ptolemy's map with some "Golden Peninsula", even before the Chinese, itself possibly derived from Indian geography. That should also probably put their (Indochina's) isolation, especially from China, into perspective. Also the other reason is trade, which I explain below.
Don't forget that the realistic supply limit would make any expedition around the Malay Peninsula completely unrealistic. So even if it would be added as some sea equivalent of Hannibal's journey for the lulz it would never really be used.
Regarding the inland, the Han dynasty also warred with some "Dayuan" (possibly Great Ionia), which led to the establishment of something like a Silk Road and of the Western Protectorate over all the Tocharian nomads-turned-city-states around 100 BCE after the various wars the Han had with the Xiongnu, placed comfortably within the time frame of the game. The western Tarim is also already in the game incidentally.
Apart from all that, China would actually have notable in-game interaction with the rest of Afro-Eurasia as well, in the form of trade relations. The system, although a downgrade from Vicky's system, is still in-depth enough to make a Chinese presence impactful to Rome itself.
Starting half-way through the game's time, or perhaps a conquest of the Tarim by one of the neighboring empires, as happened irl, could trigger a Silk Road event that would cause actual economic impacts throughout the world. The envoy Zhang Qian is an example of deliberate interaction with the West (Parthia), in 114BCE, which is considered the beginning of the Silk Road, also placed comfortably within the time frame of the game. Think silk slowly reaching Rome from China. Certainly China would have as much of an impact on Rome as India if that is the biggest concern, and India definitely interacted with Rome, particularly through the port of Berenike and trading ports on Socotra (Sukhadhara).
It would also be cool if these wastelands could have some stock resources Indian traders could retrieve and then disperse from India so these wastelands could also have an impact while still being simply wastelands.
You're right about the strange CK2 projection. I don't know how it works is exactly but it seems like in I:R there's some interesting feature where the camera adjusts itself in India however so perhaps the projection could actually be even more accurate with this system since the regions wouldn't be as squished as on a flat map. On the other hand, the projection being something like an unwrapped cone would mean Indonesia would be safely out of the picture being too far south.
The EU4 mod Imperium Universalis also has a map with Somali cities that shows how China could be safely added without having much of Indonesia visible.
Of course it would still be "ugly", but I would really like if we got away from the whole map-painting theme please... Sacrificing accuracy for an aesthetically pleasing appearance would be going in the wrong direction. Ideally the map should just be part of a globe like on Google Maps and everything should be more complex than Vicky 2 and as completely historically accurate as possible, but I digress. Make it full of pretty jungles and rivers if that's such a big deal and have a tooltip saying "Here be complex migrations and sparse tribes".
These are just the arguments for China's impact on the rest of Afro-Eurasia. As you can see China can have notable interaction since the trade system allows it. Certainly as much as India has with Rome.
Japan is more of an issue than just offering very little. At the game start it would be mostly populated by Jomon peoples like Hayato and Kumaso with some event that brings Korean pops over... then something happens and the Japanese Nakoku around Fukuoka appears around 1 CE, and that's just for Kyushu. There's really just no info about this area. Any attempt to include it would be beyond speculation.
I will give you the whole expanding map to Mongolia however. The Xiongnu were massive and could take on China up until its unification and they would add a lot of "cities" as a result.
Even then, the Xiongnu were an interesting confederation of Turks, Mongols, Kets, and Tocharians and who knows who else so including them would be a must for a horde focused expansion. Until such an expansion however they could just be overbuffed or given massive defensive attrition to make them a simple raiding nuisance to China, basically with not even half the amount of provinces as the entire Pontic and Kazakh Steppes, mostly just corridors through the Gobi and Altai between it, China, Tarim, and the central steppe. Hordes will probably be OP like they are in every Paradox game so they won't need many "cities" either way.
I suppose at this point it's just about opinion though. I would personally favour a Chinese expansion that say featured on the establishment of philosophies as a feature wholly separate from religion and anything else. It would work nicely with Indian and Hellenistic philosophies too. In fact a lot of the pro-China points brought up involve how similar the Warring States period was to say Rome's situation. Anything that would work great for China would work either as an exact equivalent or novel mechanic for India and the West, and vice-versa. So the whole notion that China would remove potential work time for mechanics from the rest of map is simply not true. It would be the opposite in fact, unlike the vast wastelands and harsh terrain that is Indochina.
I also think it's unfair to have a game about the Hellenistic era exclusively focus around the Mediterranean. What if Alexander never went further than Gedrosia? We would probably be arguing about how India is completely isolated but then Buddhist monks to Athens and then the war elephants... etc... India is still worthy of inclusion on its own right, Rome be damned. Rome is just the poster boy because they happened to unite the place. It doesn't mean Carthage, Egypt, and Iran were lesser. That's completely disingenuous of the entire Hellenistic era. I'm very happy that Eurocentrism is impossible here since the Europeans were just filthy barbarians during this time and peoples were not divided into Europeans, Asians, and Libyans anyhow.
Of course if an expansion into the Imperial age came out in say 2 years from now, I would admittedly support Burma, Funan and Japan to be included, but they would still be utter wastelands up until 50 CEish and most of their mechanics would simply be borrowed from whatever India and China already have, respectively, with maybe, 100 cities at most.
The only real argument against China that I see would be performance issues, hence why I pointed out that China did not interact at all with Indochina nor Japan and those regions just have nothing to offer but wasteland for 100% of the game time; 75% if the game is expanded to end at like 632 CE.
Apologies if I make no sense I'm tired.