We'll take this point by point

1.

Disagree. Being able to completely negate an opponents assasin ability just by having trade goods will turn it into just another phase where economic power rules. The political phase is meant to be one where someone who isn't economically or militarily strong could possibly gain an advantage if they play their cards right. The representatives are also an attempt to make the system less rigid, so that the races that are less politically inclined (examble, nekro) have more interesting things to do. Moreover, not every race has assasins, so in certain games it would be pointless, or be a larger penalty to others that rely on them. Personally, I also think that with building fleets and scoring objectives, there are already enough resource sinks in the game as it is.

2. Again, disagree. A key part of strategy with the politics card is that the owner should play it when they feel like they have something to gain, either using it to delay other events (See 4), or by playing it when they feel as though they will have a good chance of an outcome they want. This would not solve the problem of people constantly spending political cards, in fact it would probably make it worse, as one person throws in cards to bump their vote, then so would another, and you'd wind up with a similar situation with no one having a hand and just constantly topdecking the agendas.

3. I do like this. I agree that it sucks when all 3 get taken out, to completely lose out on that phase.

4. Taking this away would change strategy massively. The assembly card is deliberately dessigned to be a way of delaying the production, tech, and initiative cards, so it's a great card for the underdog. Have neighbors ready to build a huge fleet to jump you? Keep holding it so that if they do build/tech/counter early, you can possibly outvote them on a key issue to their disadvantage. Or alternatively, they delay the buildup of the fleet if they're worried about the vote, giving you a chance to build one of your own or move units for defense. This would also be trampling on one of the key special abilities of the Winnu.

Bottom line, if exhaustion didn't matter, you'd wind up with someone who blows all their planets right away to build a fleet, gets crazy amounts of command counters, and then is still able to vote like crazy. As I said in 1, the political phase is meant to be the chance where someone who isn't ahead as far as military or economics can gain an advantage.

One house rule that has been tried with some success in my group is that the person who plays the political card that round is allowed to vote regardless, even if all their representatives are assasinated, and they still get the bonus votes from their rep that turn even if it is killed. This reduces the spending of political cards like candy to a certain extent, leading to people holding on to better ones, and it ensures that when someone plays a political card, if it's something that they feel is important, they get to have a say in it.

we just used representatives for the first time last night, only thing that was confusing was the order in which we were resolving spies. Des everyone flip their spies and then the spies target nonflipped cards, or can spies target other spies?

No, make sure you read it step by step, and follow the steps in the instruction manual. See page 12 of Shards of the Throne

"Starting with the speaker, and continuing clockwise, each player who chose a representative with the spy trait must reveal it (Turn it faceup if it is facedown) and resolve its special ability."

Basically, starting with the speaker, then going clockwise. say "Yes, I have a spy" or "No I don't have a spy". If you say yes, at that time turn it over, and use its ability, before the next person in order says "yes" or "no". A spy may already be faceup if they've been targetted by another spy previous to their turn, and provided they survive (Ie. not assasinated) they may then use their ability when their turn comes up. If they do not survive, then obviously they do not get to use their ability if they are taken out prior to their turn.

A spy is allowed to target another spy that has already been revealed and played, that is the risk of using a spy early on, everyone knows who to take out, and who doesn't have the bodyguard rule protecting them. Once every spy has been revealed, then everyone reveals the remaining representatives, and the phase continues as normal.

I for one don`t feel any need to houserule the representratives in any way.

Well possibly the 1/2 votes rounded down if all three have been assassinated part.