Figure I should leave my two cents:
Morale system definitely changes the game. Some good aspects is it restricts farming and more protection for smaller empires. However, in a single player family system, there are good ways to exploit. If you're active/bigger, any tiny player can absolutely ruin you during expo phase before portals up. Really small players are very scary -- they can explore in your systems any time and if they keep track when you explore, they can really mess you up. I was also one of the large players opped early on about 15 times in a row . . lost a LOT of infrastructure (cash factories three times), and there is literally no way to fight back to the person. Both of these issues can be dealt with with multi member families and specialization. With just one person, it's very difficult. You can't keep one family member low NW to deal with piranha.
Another aspect -- it makes morale planets so much more important. I realize it's a random aspect to the game, but I currently have over 250 planets and NOT ONE morale planet (I didn't win the lottery. . ). I haven't seen one the whole round. I finally started asking around to see if Supernova still had morale planets. . Maybe we can all start with higher morale and don't have morale planets??
Attacking generally becomes more random: With any ops ruining morale, I could have fallen victim to laser traps, etc. It's really not feasible to get adequate intel. Also, if smaller players fight back with retakes, it is basically impossible to net any of the planets (you lose 30%+ per attack, they lose 3%).
To consolidate, I would propose: Starting higher morale, no morale loss with non aggressive ops (at the least), equal morale loss for each player if a smaller player attacks you first (or something like this. . .).
Just some ideas! As is, I haven't played IC in over a year and I don't expect to play next round.