Hmm, we can do the chat here. I'll have to take a step back though explain the "strategic situation" I found myself with though with Betrayal mode in general first.
Let us consider, relative to the player and AI in terms of relative assets.
Player assets:
A very very strong single ship that, if not destroyed, escapes from combat with no lost in resources aside from time.
The ability to more adeptly pursue research...if that is the only thing needed.
A win at all costs attitude, casualties are meaningless if you win. The goal is to not build a healthy happy empire. The goal is to destroy everything.
AI assets:
The ability perform simultaneous actions at once, such as constructing building and researching techs.
Much deeper access to resources to replace armada losses (it seems)
Vastly greater populations and thus the ability to replace them
The ability to band together and cooperate in a much greater fashion.
Aside from the Hydral, neutral to everyone.
AI learns superweapons and other unique techs.
In summary, the tactical situation is that the hydral starts out with (single flagship) tactical advantage, but the AI will be able to quickly overwhelm the player diplomatically, economically, and technologically.
The solution, then, is to exterminate them as fast as possible.
So for your points.
It is not 1 or 2. Actually, because of how extreme 1 and 2 are, 3 becomes the tactic of choice. Oh no that's the right word. It is THE tactic, period. Wipe out the armadas ASAP. Keep them dead. It is the only option. If they get to your world, your paltry armadas don't stand a chance. If they get on the ground, your puny population won't stand a chance.
As to your other ideas:
Regarding player armadas. They were troop transports, period. They were no use aside from this. My armadas were already pathetically weak against the enemy. The Boarines I had left alone for 1.5 years, and they got 780ish armada power. The peak of my armada power was like 400. These upgrades were funded from previous conquests, they would be weaker if I was peaceful. Increasing the player armadas cost will put even more pressure on the player flagship.
Similarly, increase the enemy armada construction speed (and the resources to fund this) would only put me further behind, further increasing the pressure for the flagship to perform.
As far as influence, it already has tanked. From the very start (day 1) , every race who went space faring started attacking me. Further hits are meaningless. It is because they start so low that I felt no lose in murdering everyone.
Increasing baseline time for player flagship attacks is the only thing that would help so far...but that would increase the gaps that could cause the player planet to fall. For example, at the end of my game I just had the Peltians. I simply couldn't kill them fast enough so I finally broke-down and research some nanotubes. During that 6 month period, my 3 fleets of 400 power had dropped to 200 power because a single armada was spawned to defend it while I was gone.
So...to bring this all back around.
My single flagship smashed all the other armadas then I bombed the planet to dust. It was the only logical choice. The other empires will outpace me quickly in every-way, and they all want me dead from day 1. My single flagship would never be as relatively strong then from day 1, so I exploited it.
If you nerf the flagship, you must make peace a reasonable strategic choice, otherwise I will use the ship anyway for it the only real player advantage.