One thing that I have thought about is possibly expanding the role of the GM. So my idea is that instead taking statistic from real life and applying them to Atlasia, The GM creates the statistics.
My two problems would probably be that the red state with NY and the magenta one in CA would be enormous population-wise, with some of the northern plains states smaller than most of the counties in the large ones.
I thought that for big city states like those, maybe the state government could be designed around metropolitan sovereignty. If that makes any sense. So you'd have in the magenta state a local government based out of San Diego, another out of L.A, another out of San Fran, etc. Ditto for the Eastern Red state.