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I'd say have a few games on pioneer, and when you feel that you've had a good "comfortable" win (ie, nobody leaves, nobody dies, you finish in under 6 years), then move up. Rinse and repeat for Veteran and Viceroy. After that the changes are relatively small, and you should know the game well enough, to move up one difficulty per win. Prestige 5 and 6 (+50% production cost, +50% food consumption) is a bit of slap in the face though. Above Prestige 10 seems to get rather gruelling.
The only somewhat important unlocks for me were embark bonuses, more range on the global map and houses being essential. Other than that I don't think anything was of that much help.
You don't "need" the upgrades and all of that, it simply makes the game much smoother at higher difficulty levels. There isn't quite as much of a rush when you can plan with more tools at hand.
I think there are people who clear Prestige 20 at level 1 or some such insanity as that, so it mostly depends on your own desired level of play. I prefer a bit more casual play, but my first couple games at Viceroy level were pretty easy, so time to bump that difficulty up and start clearing Prestige levels.
I would say I'm MORE punished for not moving up, because I'm getting like 10-14 food at a time, the other factions always beat me, etc etc.
I'm just mushy brain and beavers cutting trees goes brrrr.
Even if you want to start slow (or just not fond of "learn by failing" approach) avoid playing settler for more than 1-2 games, if even that, the rewards on it are so low it's actually bad for you. Pioneer gives you ~2 times the xp but ~3 times the upgrade resources, worse yet settler isn't going to stop you from gaining deeds. Reclaim those and your level quickly rises, which unlocks a lot of new blueprints, which is kinda good cus many of them are great (ranch ftw, and MINE! FFS! It's so important I dunno why it's not a starting BP) but has a side effect of bloating your BP list with arguably useless garbage. Thing is, if you play pioneer you'd have enough resources to unlock the 4th pick in BP selection and win back some sanity but if you were on settler... no such luxury.
Eww, don't remind me of humankind. They really fell flat with that one.
You ever played old world? One of the best 4x's I've ever seen. They've really hit the spot with a lot of their design decisions such as resource pool handling and their use in production or how land claiming is managed. Also their building adjacency bonus system is actually sane and fun which pretty much never before happened to that particular system.
I don't have any issues with those "experts" that play prestige levels after an hour of experience. They're not telling the truth, and that's fine.
Like you, I played at Settler for a fair amount of time, and am just now comfortable enough to play Pioneer. I am level 9, with quite a few unlocks.
There is no need to get aggressive with the difficulty levels. Slow and steady. Games don't need to be punishingly difficult to be fun.
settler is pretty good starting out. maybe unlock some -2% queens rate and a couple +1 to embarkment points. the free cornerstone re-roll is a good target. nothing that requires special currency yet. get a feel for the game, the tempo and buildings.. biome differences.
pioneer up to all the species special housing unlocks. maybe the herbalist hut unlock, or a couple more embarkment points. it's very helpful to pioneer up to the third caravan unlock, or some trade bonus unlocks.. 10% discount can be very helpful or additional trade slots for buildings/cornerstones for sale. pioneer up to some easy cornerstone options is a good call as well. some good time spent here .. finding your groove.
veteran+ onward based on global map challenges or daily challenges or how much you want more to unlock.. paving your way to prestige..
prestige+ everything is unlocked.. make your way to p20. or find a speed you enjoy.
note: there are 5 profiles you can create. you can easily set a profile to each difficulty and challenge yourself with goals you set. ie: no loss run (including complete the tutorials for +2) or .. prestige only profile.. ect.
game has a good amount of learning to it (nuances). but once you get that curve and tempo down.. it can become much easier. it's a fun game at any level of experience however. at least i think so.
bottom line.. the difficulty you feel most challenged without frustration felt is up to you. some folks can easily handle vet+ (experienced) while others who have never played a rogue lite or city builder.. might need a little practice first.
all the best.