What we could do to solve this together with decreasing the "happy" threshold from 80% to 60%, is to also lower the target morale threshold of a province down from 100% to 70%. Meaning that a province without any morale boosts will only raise until 70% morale and not 100% morale, so that you have to achieve the other 30% via morale bonuses, like the then increased neighbour bonuses and Infrastructure. At the same time the starting morale of provinces should also be lowered probably from 70% to 50% or something. This would incentivice players to build Infrastructure in their cores to get more bonuses to reach 100% and would make it unncessecary to increase the expansion penalty further. It would also make it easier to reach the happy state in far away provinces due to the reduced negative neighbor penalties.
* Would allow to change influence of a neighbouring own province at 25% morale to +/-0 (and to a bonus if morale of the neighbouring province is higher). Because @Torpedo28000 is totally right that controlling adjacent provinces should never be negative. Cause it's weird, unintuitive and leads to ugly, chaotically torn chessboard maps as well as to weird behaviour of players. I even sometimes found myself trading away provinces far away from the capital or deliberately letting them revolt in order to keep only a few isolated "islands" within allied or neutral regions, because these can maintain an acceptable morale while coherent territory cannot.
* Would allow to reduce the expansion malus (which isn't a good one, for the reasons I wrote above in this thread).
Con arguments: Also after thinking about it for a while, none coming to my mind.