I agree with much of what has been said here already, but would just like to expand on factions by suggesting, as many others have in the past, that they should themselves be expanded. A system similar to what was in CK2+ or HIP would be an ideal baseline in my mind, with cultural, religious, economic, hawkish/pacifist, etc. factions becoming permanent fixtures, and with unique/temporary factions that can rise and fall focused on specific characters (for example, a faction that arises around a well-liked member of the ruling dynasty or around a particularly powerful vassal).
In this system, traits, hooks, and bribery would push characters into different factions, each of which having its own set of likes/dislikes/ambitions, that will side with a ruler who acts in accordance with their desires, and side against one who doesn't. Faction leaders would run factions in a similar fashion to dynasty heads, being able to make deals with their ruler on behalf of their faction (e.g. we will support your proposed change to a law in return for changing this law, or arresting this rival character, or promising to declare war on this persons/religions/factions behalf, etc.), committing members to new 'pacts' (a pact of inviolability for example, which would see all members of faction declare on the ruler if any one member is arrested by the ruler without cause), and even allying with/blackmailing other faction leaders.
Such a system will mean that rulers will nearly always be at odds with one faction or another, that creating complete harmony in the realm is something quite difficult to accomplish and impossible to maintain. It will also scale well with the size of realms; the rulers of duchies and small kingdoms will have an easier time managing these factions given that their few vassals can be more easily convinced into remaining staunch loyalists, whereas as a realm becomes larger, spanning multiple cultures and even religions with many vassals and sub-vassals joining factions, characters will have to choose which factions to align themselves with, a choice influenced by a characters own traits (a cruel, wrothful ruler will not want to align himself or make concessions to isolationist/pacifist factions; a cynical ruler would not want to support a religious faction, and so on) with correlating results in stress. I think such a system would have a lot of potential for interesting event chains too, even if I'm personally not a big fan of the emphasis on such events in CK3. In combination with nerfs to character stat bloat across the board and dread reduction, large realms will be much more unstable when a ruler isn't a fantastic diplomat or a master of intrigue.
I also think there should be systems in place to make ruling distant territories and vassals more costly and difficult, but I am not sure what would work best here (perhaps a scaling decrease in revenues, and an increase in time to contact, which can be reduced by building roads or other infrastructure?). As has been mentioned previously, war should be made more expensive to wage, and this would work best in combination with a more sophisticated economy, with war serving to disrupt trade, angering nobles and city-dwellers, or to reduce seasonal/yearly yields from harvests and taxes, leading to food shortages, particularly following large losses of troops. The time needed to replenish armies should also be increased, a time which can be decreased by more stringent laws or successive requests for troops from vassals, with consequences ensuing in terms of public and vassal opinion. Otherwise, I think the training wheels need to come off in terms of providing the player protection from multiple assassination plots, from knighthood and battlefield deaths, and so on. CK2 wasn't really any more difficult than CK3, there was just a greater degree of RNG and less shields for the player from random deaths, but those random deaths (from disease, duels, assassination, accidents in society and lifestyle events, and so on) were what created the chaos that kept the realm churning.
