imo the main (and obvious) reason why big alliances are formed (and why there is no multi polar world in strategus) is so that players from these alliances win the game as easily as possible. those that are unlucky and won't get into the first alliance will form a second alliance hoping they will be the winners. in big alliances you have the numbers, you have the money, you have full roster so its easy to pwn everyone weaker and feel like the boss.
some loom points, strategus points, faction points, titles or anything else is far far far behind and won't change a thing. 9/10 players will prefer to pwn to pwn to pwn to pwn (even being the last one peasant in their alliance) over solo getting some crappy loompoint or crappy title.
the game how its designed now just works this way. there is no objective, so the only objective everybody is able to come up with is to conquer all the others. well what else would u expect from a medieval simulation? and how to conquer others easily without being a part of a care bear? you would have to completely change the game/rules if you'd want to achieve anything else than what you saw in previous strateguses (and what you will see in this one too).