I have so far designed and played three custom races, and all of them have the Patriotic trait ... so you can guess I feel the same way as you.  I like playing with lots of colonies, and the penalty really kicks in fast.

so far i cant get past turn 55 or so but i thought the morale system was to weak in beta 4, so the fact that people are saying something about it means they are looking at it

on the other hand i like large maps and large empires so ill have to see how it goes when i get to late game

Yes there are ways around and yes it is something that should exist to create a balance between tall and wide empires especially on larger maps. We are just saying that the penalties may be too high no higher maps. A 1% drop for every 5 planets would be better in an immense map with abundant worlds as opposed to the current 1% drop per planet. On some of the smaller maps with less worlds this would be okay.

Morale isn't that big a penalty...

Even if your morale stinks as bad as ass in the dark ages, you still don't have to worry about it as long as you have properly defended planets.  It's not nuking your production capabilities, just your ability to defend against takeovers.  If you've got the larger empire, the hit to your influence production shouldn't be a problem, you'd be making way more than you're losing thanks to a larger base of planets compared to a smaller empire.  All you'll need to worry about is losing defenders and getting invaded on planets with bad morale.

1% per planet is also pretty pointless as long as you have other multiplicative bonuses as well.  An intimidation center counteracts 50 planets.  If you have 50 planets, you should have quite a few empire wide multiplicative bonuses on top of this, between techs, planet resources, space based resources, and ideology upgrades.

Planet quality needs to factor back into things though, 30 pop on a planet is rough on the morale production, really nice planets are really needy on the morale, while the crappy places to live are just fine.

I agree that rather than being 1% per planet it should scale dependent on the map size. I don't think the penalty is a bad idea in itself though.

   This I agree with.  But given how pointless morale is right now, it doesn't really matter.

Luxury trade routes are only good for +5% each from what I can tell.

I hate to mention this because the Over Powered faction will be on it like a duck on a June Bug. The Morale relics make it all go away.

I am on T100 in an excessive game, about 25 colonies. My overall approval was at about 60 with 14-15 colonies, when I researched precursor archaeology. I built 2 sb to control 3 morale relics and after upgrading 3 levels I am at about 90 approval. There are still several levels to upgrade and there are more relics if I need them.

I hope I am not kidding myself about this. This morale problem is new to me I don't recall anything in GCII that I couldn't handle with little entertainment. If the relics don't manage it, and it comes back hard, I will be back here crying the blues. 

Morale may not have much in the way of percentage bonuses, but the the things it factors into do, you can zero out your approval, but you can't zero out your soldiering, influence, and growth along with it.

as near as i can tell the approval relics dont work according to the xml's they provide an 'approval' bonus which was gutted in B4 (possibly B3)

I just checked and Approval Relics ARE working in Beta 5.

Proof (clicking on the pics makes it more obvious):

Just before installing a module for an Approval Relic:

One turn after installing the module that tapped into the Approval Relic:

In fact, I actually saw the approval go down for a moment as the population increase took hold, but then shoot up once the Approval Relic check was made.

So it appears it is working at least a little.

EDITED:::  Hooked up a second Approval Relic (no pics this time) and the approval rating of that world went up again.  So it does appear to be working at the moment.

so if they are working as your testing shows the only thing i can assume is that they are using leftovers from the approval system that was scrapped earlier so that the values reported are not accurate to what you should be getting

heres the xml from approval relics.

<StrategicResource>
<InternalName>ApprovalRelic</InternalName>
<DisplayName>APPROVAL_RELIC_LABEL</DisplayName>
<Type>Relic</Type>
<ArtDefine>MoraleRelic</ArtDefine>
<HowToTapText>STRATEGIC_RELIC_TOOLTIP_UNTAPPED_MSG</HowToTapText>
<Resource>
<EffectType>Approval</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<ValueType>Special</ValueType>
<SpecialValue>
<Special>GetValueFromStarbase</Special>
</SpecialValue>
</Resource>

and heres a sampling of others that give approval bonus's

<RaceTrait>
<InternalName>Content1</InternalName>
<DisplayName>Content1_Name</DisplayName>
<Description>Content1_Desc</Description>
<Mod>
<EffectType>GoodsAndServices</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Flat</BonusType>
<Value>2</Value>
</Mod>
</RaceTrait>

<PlanetTrait>
<InternalName>SereneWorld</InternalName>
<DisplayName>SereneWorld_Name</DisplayName>
<Description>SereneWorld_Dec</Description>
<RelativeWeight>9</RelativeWeight>
<PlanetClassSelect>
<MinPlanetClass>10</MinPlanetClass>
<MaxPlanetClass>16</MaxPlanetClass>
<Weight>95</Weight>
</PlanetClassSelect>
<PlanetClassSelect>
<MinPlanetClass>25</MinPlanetClass>
<MaxPlanetClass>26</MaxPlanetClass>
<Weight>5</Weight>
</PlanetClassSelect>
<EffectModifier>
<EffectType>Influence</EffectType>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<Value>0.25</Value>
</EffectModifier>
<EffectModifier>
<EffectType>GoodsAndServices</EffectType>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<Value>0.25</Value>
</EffectModifier>
</PlanetTrait>

<GameEvent>
<InternalName>RuthlessVisionEvent</InternalName>
<DisplayName>RuthlessVisionEvent_Name</DisplayName>
<Description>RuthlessVisionEvent_Dec</Description>
<ArtDefine>Galaxtic_Event_World2.png</ArtDefine>
<Type>GalacticEvent</Type>
<Weight>50</Weight>
<Choice>
<Type>Benevolent</Type>
<Description>RuthlessVisionEvent_Benevolent_Bonus_Name</Description>
<BonusDescription>RuthlessVisionEvent_Benevolent_Bonus_Dec</BonusDescription>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Faction</TargetType>
</Target>
<Lifetime>Instant</Lifetime>
<Modifier>
<EffectType>CultureBenevolent</EffectType>
<Target>
<TargetType>Faction</TargetType>
</Target>
<BonusType>Flat</BonusType>
<Value>30</Value>
</Modifier>
</Trigger>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Planet</TargetType>
</Target>
<Lifetime>Target</Lifetime>
<Modifier>
<EffectType>Research</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<Value>0.1</Value>
</Modifier>
</Trigger>
</Choice>
<Choice>
<Type>Neutral</Type>
<Description>RuthlessVisionEvent_Neutral_Bonus_Name</Description>
<BonusDescription>RuthlessVisionEvent_Neutral_Bonus_Dec</BonusDescription>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Faction</TargetType>
</Target>
<Lifetime>Instant</Lifetime>
<Modifier>
<EffectType>CultureNeutral</EffectType>
<Target>
<TargetType>Faction</TargetType>
</Target>
<BonusType>Flat</BonusType>
<Value>20</Value>
</Modifier>
</Trigger>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Faction</TargetType>
</Target>
<Lifetime>Target</Lifetime>
<Modifier>
<EffectType>Accuracy</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Starbase</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<Value>0.1</Value>
</Modifier>
</Trigger>
</Choice>
<Choice>
<Type>Merciless</Type>
<Description>RuthlessVisionEvent_Merciless_Bonus_Name</Description>
<BonusDescription>RuthlessVisionEvent_Merciless_Bonus_Dec</BonusDescription>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Faction</TargetType>
</Target>
<Lifetime>Instant</Lifetime>
<Modifier>
<EffectType>CultureMerciless</EffectType>
<Target>
<TargetType>Faction</TargetType>
</Target>
<BonusType>Flat</BonusType>
<Value>30</Value>
</Modifier>
</Trigger>
<Trigger>
<OnEvent>OnEventChoice</OnEvent>
<Target>
<TargetType>Faction</TargetType>
</Target>
<Lifetime>Target</Lifetime>
<Modifier>
<EffectType>GoodsAndServices</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Colony</TargetType>
</Target>
<BonusType>Multiplier</BonusType>
<Value>-0.05</Value>
</Modifier>
<Modifier>
<EffectType>Accuracy</EffectType>
<Scope>Global</Scope>
<Target>
<TargetType>Starbase</TargetType>
</Target>
<BonusType>Flat</BonusType>
<Value>0.25</Value>
</Modifier>
</Trigger>
</Choice>
</GameEvent>

everything else that modifies morale targets goods and services except for approval relics that target approval if they are working (which they shouldnt be( you made 2 mistakes that cancel out kind of thing)) its not as intended 

As I mentioned in previous posts, I've finally had the chance to really sink my teeth into Beta Five on an Insane Map (having to start over after every patch set me back a bit ).  Well, I've found some more oddness with Approval Relics.  Almost certainly because of the XML stuff mentioned by androhalforc.

I was merrily puttering along, keeping my approval at 100% thanks to several Approval Relics I had found.  Once I hit 100 planets, however, my approval started to dip.  Once I hit 105 planets, it absolutely tanked.  Calculating everything, I should have been receiving a bonus of 210% from all of my installed relic modules.  Throw in an extra 10% thanks to a Mega Event, and I should have no troubles whatsoever.

But drop it did once I hit 100:

Here are a few screenshots showing the massive drop in Approval.  A 6% change in Empire Size Penalty really shouldn't be causing that huge amount of a drop.

The first one shows all of my planets at 100% with 99 planets:

The second one shows that two dropped when I hit 100 planets:

The third one shows the carnage that has been visited upon my empire at 105 planets:

Now I haven't tested how many Approval Relic modules it will take for to get back to 100% (even another 40% only puts a small dent in it).  Still, at a theoretical 220% bonus, I shouldn't have to worry yet.  Obviously I'm getting nowhere near the amount I "should" be getting.  

I'll be sending in a ticket on this tonight, along with the observation about the XML from androhalforc.