I think the rivalry system is fundamentally flawed. The problem is, that while, there is some reason to the beginning of the rivalry, once that issue is resolved, the rivalry continues just because it is there.
I think there is a better way to achieve what rivalry system achieves -- scrap the rivalry system altogether and have an "Ambitions" system where each country would be able to designate several "ambitions". These ambitions could be something like:
- Have most powerful army/navy in the region
- Be the most dominant trade power in the region
- Be dominant country in the HRE
- Desire control of specific province/region
- Be most powerful country of a specific cultural group
- Be most dominant country in a colonial region or company zone
etc, etc. Country could have more than one ambition, depends on balance. The scope of the ambitions could be based on the present capabilities of the country. As country grows more powerful, their ambitious could become more and more grand... at first, it could be just competition with local powers in local regions once you are powerful enough, it could be competition on a global level, etc.
So, this would mean that, if one or more country has the same objectives, they automatically become rivals. Once those countries stop having the same ambition, the rivalry automatically ends. The power projection system can also easily be tied up with this (based on how much ambition you have achieved etc)
After all, there are no permanent friends or foes in diplomacy. There are only permanent interests.