Cast a spell with a spell?

I would say even more - why not introduce spells triggered by place/event etc.

spell que of sorts for cities, units, places, borders, resources etc...

a bomb would be awsome.

Yeah then you could make trap skills and such.  Abilities where enemies crossing into your border have to resist or be slowed, damaged etc.

Some CoreItems.xml have modifiers such as these

      <GameModifier>
            <ModType>Unit</ModType>
            <Attribute>UseSpell</Attribute>
            <StrVal>Escape_Ability</StrVal>
            <Provides>Allows the unit to cast Escape, which allows you army to escape from tactical combat to your capital</Provides>
        </GameModifier>

I never tried using them inside a spell but its worth a try.

Tried it and it does not seem to work.  Neither does MeleeAppliesSpell. I was trying to make a spell where the casting unit and enemy unit would deal damage to each other until one died but it does not seem to be possible.

Sorry, I tried this awhile ago and it doesn't work. I just found the thread. You can have a melee apply a spell that applies a melee spell. For instance, having a healer strike an enemy. That enemy unit would then give +3Hp to any unit he hits. You can also make the melee apply a spell that applies a melee defense spell. So every time that enemy is hit, he will also take 3 fire damage from your spell. It's too bad we can't just have a spell apply a spell, but I can see why the devs had specific use given how the magic system is set up.