First of all, maybe we misled you but we're not planning on having game resets. Just to clarify.
Also, let me clarify a bit more of my idea (again, I haven't cleared this with the other devs so don't think this is a formalized game idea). My thinking was to have treaties be made up of clauses. Most clauses are pre-made, such as "_ will not attack _ for period of time"(peace treaty). Also, we could have templates for treaties that automatically fill a specified treaty with clauses, so if you wanted to quickly make a peace treaty, then you could just click "Peace Treaty" and clauses would appear for you to fill in or add to. So with these clauses (sort of like modules in the ship customization process), you stick them together to form treaties of the exact type you desire.
But then comes the neat part: what if you want a clause that is not pre-made? Well, we'll include a player-made clause option. Basically what this is is a sentence/paragraph written by the player making the treaty that says anything they want to. So far I have not come up with a good way to enforce player-made clauses in-game, so for now these clauses are just a formality, and not enforceable except by independent player action.
The way these treaties would work, when one player creates one they send it to the other player(s) involved, who then either except all the terms, or send back a new copy that shows what clauses they except, what clauses they refuse, and what clauses they wish to change (and their changes). For very simple treaties, they will probably be accepted right off the bat. But very complex treaties will often have many revisions, especially if multiple nations are involved, but this adds to the negotiating and diplomacy aspect of the game, and will make sure (sort of) that fair treaties are made. (The exception is when a really powerful nation forces a weak one into a treaty, but this too is realistic)
As for blood bonds and utter nemeses (the plural is with -ses), I don't really like that idea of having hard-coded states like those. But besides, with my idea for treaty creation, you should be able to make treaties that sort of represent those kinds of relationships anyway.
With my idea you also can have potentially many different kinds of relationships, by adding a clause like, "Both nations shall change their tactical states to ___".
Also, it would be easy to manage things like unit sharing, by adding a clause like, "The following units shall be placed under bilateral control: (list of units)". The same goes for facilities and stations.
Granted, the above two clauses would need to be added as pre-made clauses, but thats possible I think and not too hard to program.
Also, relating to what Phenoca has been saying, by adding pre-made clauses treaty creation is easier and more stream-lined, but also gives players that option of making player-defined treaties official documents. I have had to deal with a good amount of completely player-run diplomacy in certain games, with no treaties or anything built into the game, and so I think its helpful to have both options.
Wow this is a long post. I think I'll stop here for now and see what you guys think. Since I basically outlined my whole idea I guess I'll bring this up with the other devs now too.