By the end of the game's timeframe, Rome and Han had about the same population (just under 60 million recorded in the Han census; estimates for Rome ranging mostly between 50-70 million). At the game's start, each of the Warring States are about comparable to Carthage or one of the Diadochi. All of them would be dwarfed by Maurya at the start. And Han expansion stopped once it hit harsh environments or natural boundaries, just like Roman expansion did.
If the early Maurya blob doesn't wreck the game, a mid-game China blob won't either. If Roman (or Seleucid, or Carthaginian) expansion works in a way that makes sense, so will Chinese expansion. China in this period should behave much like every other state or region on the map, which is the main reason why I'm arguing for its inclusion.
The Tocharians weren't exterminated- they split into a number of different branches, one moving west into Bactria (eventually setting up the Kushan state), and another branch settling in the southern Tarim and the foothills of Tibet. Iranic groups have a long history in and around China- they definitely introduced horses and chariots to Shang China, and maybe also bronze- and even after older ones like the Jiang were assimilated more kept coming in from Sogdia and Iran.
I've been reading up on this for about four years and I haven't found a single good English source that is specifically about the Warring States. There's great books on "Early China" (generally Shang and Zhou- Warring States is the last part they cover), "Early Imperial China" (Qin and Han, with the tail end of the Warring States as introduction), and there are general histories (which usually focus on the last several dynasties and pass over pre-imperial China very quickly). Sinologists study it and recognize it as an important period, but nobody publishes books about it.