For now, I'm playing on the very small, quick-game maps since I'm trying to test as many nations, themes, etc., in the time left before the gold date. Because of that, I rarely try to take on more than just 1 or 2 opponents. If I add more than that, there just isn't room for us all!
As far as AI setting, umm, "Normal" is rough enough for me.
My game is steadily improving, but I still lose more often than I win.
I'm trying to remember, but I'm not sure I've yet played against a Blood magic-dependent AI opponent, so I'll have to pass on trying to answer that one.