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It can be a fun challenge to build a city that is both aesthetically pleasing and pretty strong financially.
In terms of sacrificing living space, it depends on how crazy you want to go with decorations. Parks and small plaza's are nice, as well as placing trees between buildings as well. It does wonders adding greenery amongst the almost endless amounts of grey and white apartment buildings.
Of course you will forfeit potential tax income by doing this, so it helps to overproduce some goods and sell them to help offset this. It's best to build parks and what have you towards the end of the game. They can be expensive, and early into the game you won't have a large stream of money coming in.
And yeah, having executive buildings scattered all across the island really helps to diversify the skyline. One thing I like to do is have my monuments face a beach, and have the buildings directly in between the coastline and the monument be mostly employee buildings, with only a few scattered engineer and executive homes. This gives a more clear view of the monument from the ocean, as well as the monument's visitors getting a nice view of the sea from the balcony. Which makes for some really nice screenshots!
So there's quite a few things you can do to make your cities look pretty unique and interesting. Just think of things that you would like to see in a city, and what you would find enjoyable to look at if you were to live or visit there. I just wish there were more decorative items to choose from. What we have to work with is nice, but sadly limited. There's only so many fountains you can plop down until it becomes pretty repetitive.