Well core idea is simple and basic, as i said details are to be considered. If you trade from far away you pay more, it motivates you to care about countries close to you.
for your worries
1. Just like how you click one unit to a province closest is chosen, same can be done with invisible trade convoy unit(to express similarity how it works). It's destination is between capitals.
2. Blockades via. ships etc. would be indeed more detailed but if you ambargo X country, invisible trade convoy unit of X country can not pass from your realm, just like military units.
3.I didnt quite understand what you meant but Trade harbor is regular harbor, i used adjective to express its additional benefit. I agree money is not a must for transport cost, it can be a resource.
4. I agree, if tariffs to be added, you should just create default tariff mode.
About blockade more:
I didnt thougt about it but looks like cool idea, in order to apply blockade:
trades should be non-insant, requiring time.
- previously mentioned trade convoy unit should be visible and manually controllable. It should move way faster than infantry, like x10 more speed, and on seas should be faster relative to land. Unit can not pass from countries who ambargod, otherwise can pass from anywhere. If meets with an enemy unit engages to a fight and will likely loses.
-Tariffs should be made simpler since trade requires time&manual control. For coalition members %0, for map share %0.5, for right of way %1, for peace %2, cease fire %5, ambargo no pass. Numbers are to be tweaked.
-You wont pay transportation cost on deal, but convoy will consume resources(money, coal etc.), related to amount of resources transported.
-When convoy enters a foreign country during transit, it pays tariff cost automatically, if there is no money convoy waits until enough money is gathered or another order is given.
-When deal is done, convoy unit will be genareted from exported and will move to importer's country automatically(shortest distance), which can be tweaked manually. Players may create trade routes deciding on safety&tariff costs.
Overall i think blockade mechanics is more trade detailed, requiring micro manegement of trade which is not a taste for everyone for a military focused game, its a more like Paradox Game mechanic... But my first trade idea is cool and simple.