The part of the enemy you have to occupy to allow the exhaustion to drop below 0 depends on the type of the wargoal. Some of the wargoals demand any province, some (usually those about capturing a state) -- a province in a particular state, some -- any province in the capital state. If you're demanding transferring a subject, AFAIK you need to occupy any part of that subject. However, if the subject itself is not a participant in the war, you have to occupy the overlord's capital (any part of it).
The game does a really poor job at communicating what exactly qualifies as a wargoal occupation.
Any part of the capital state is always enough though.
> playing as the confederacy i pretty much all of northen usa including washington d.c
I suppose either you're using some mod that changed the mechanics, or for some weird reason the US capital is not in DC.
This is what's happening and it's incredibly annoying! It makes the "transfer subject" basically a noob trap,
especially since the most likely opponent you'd want to put it on is the UK. The UK AI is either smart (because it leaves at least 100k men in hqs to defend the isles) or dumb (too dumb to actually deploy its armies), but either way I find it's basically impossible to naval invade; even if you win the sea battle massively, you physically can't land more than 100k guys because the "unsupported naval invasion" modifier is so big, and without admiral rng you're capped at 100 flotillas participating in a naval invasion.
In the big picture I can't be that mad about this? I don't think it'd be physically possible for someone to naval invade the UK in the game's period, though that probably does come down more to naval supremacy, but then we'd have to talk about the absolute state the naval game is in (why of course WWI featured basically monthly battles where entire fleets were sunk and then back to full strength in a few months to do it again, why do you ask)?
I do feel like a crippling blockade of the british isles should have as big an effect, but idk.
Anyway, picking "transfer south africa" in a war where the UK is sticking its nose where it doesn't belong is basically consigning yourself to negotiating with the UK at a minimum of 0 warscore. This feels bad. To me, the "easy" fix (idk on the backend if this is so easy) is that adding that wargoal automatically draws the relevant subject into the war.