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And since you have asked for "a way for the 'weaker' countries to catch up if they 'play well'"... This is a very counterintuitive way of staying out of wars or limiting them to a minimum time. While making sure through carefully devised diplomacy that UK, US and France are bogged down in eternal fighting.
In the end it could be summed up by this:
1-2% overtake across 60 years is more managable than 7-15%.
That's what I always do. I don't bully small countries rather support them in every way to make them a meaningful faction. The only problem being, the GDP system is so broken that nomatter what I do those small countries will be worthless compared to the 'GDP spam country' (GB or USA or France...)
The problem is the GDP broken AI faction steamrollng everyone else. Not me.
Leave that to the 'legendary' difficulty option. not everyone want's to play like you.
So, I think that the key thing that you're correct about is that taking just any territories really doesn't matter. What matters is taking European territories. That is where all the money is. Due to the game mechanics, however, the player has almost not control of this, as this is a land battle thing. I have not yet been able to take a major enemy province by amphib invasion.
TLDR: It is possible to get your nation to be the top economy but you will probably not have a lot of control of that.
Occasionally get notifications that the respective country is trying to regain control, but they inevitably fail a turn or two later. Got no incentive to fight on. My goal for the campaign was to try control most of Europe and Africa, but now there's no way to do this. So I'm just going through the motions of building a bigger fleet with nothing to do with it.
This isn't actually a crippling difficulty problem for the player because the player can usually rely on their designs being superior and their tech focuses more relevant - but it DOES mean that any war against one of the runaway majors becomes a tedious chore of fighting one largely identical battle after another against endless, endless hordes of chaff before you finally, at some point, manage to convince them to back down. Again, it's not really a difficulty problem so much as it is "I've played the game extensively across nearly a week and have barely finished one in-game year with very little forward progress to show for it because the Royal Navy dies but does not stop coming."
In theory, if the AI was decent at building ships, yes, that would be true.
In practice it's not that hard to design unstoppable superdreadnoughts and murdercruisers that mulch entire AI fleets for very few losses or damage so that a massive GDP simply means you have to kill more things before you can convince the AI to accept a peace treaty or get enough tonnage in theater to blockade and kill the enemy economy. As long as your own economy is strong enough to support a handful of good killfleets, you're golden.
Mind you, I'm well aware this isn't ideal and is at best one flaw in the game canceling out another. Ideally the economy should be balanced around it being possible to compete with the majors, albeit perhaps at a significant disadvantage, while the AI presents an inherent challenge even if they don't have a major economic advantage. But with the state of the game being what it is the AI having a runaway economy is merely "annoying" instead of "I literally cannot win at anything."
This follows close on the heels of another game I took from 1930 to 1954, I had to quit the game, come back and my saved game was gone.
You can, just expand early in an economical way. Also, keep your TR safe.
With save and loads... since this is a game, and that's a game's way.
[UAD Campaign SS - China, WIP, Captured All Japan Lands, 1891_08]
https://steamcommunity.com/sharedfiles/filedetails/?id=3158516055
https://steamcommunity.com/sharedfiles/filedetails/?id=3158516216
[UAD Campaign SS - China, WIP, East Asia expansion, 1892 Year End]
https://steamcommunity.com/sharedfiles/filedetails/?id=3159443394
https://steamcommunity.com/sharedfiles/filedetails/?id=3159443444
[UAD Campaign SS - China, WIP, Conquered India, 1894 Year End]
https://steamcommunity.com/sharedfiles/filedetails/?id=3161361303
https://steamcommunity.com/sharedfiles/filedetails/?id=3161361490
(Difficulty: Legendary, no MODs)
What you can do in the game, is drag them into war.
You can take their lands, sink their TR, or at least, keep them in war status on paper (and national budget / unrest).