OK, I've beat the game multiple times on normal, so I just bumped the difficulty level up to "challenging", and now I can't seem to build an empire worth a crap and I'm guessing it's because I don't fully understand how population works.

On "normal" I absolutely crushed everyone, no problem!  My empire got 6 times powerful as all other races combined by the third age.  So, I bumped the difficulty up a notch and now I can't even compete on empire strength. 

Whenever I run into another empire on an insane map they are 200% to 300% more powerful than I am and, of course, they immediately attack me and then it's a slow slide to defeat.  I'd at LEAST like to be able to match my first opponent in empire strength but can't seem to figure out how to get there!

It always seemed to be the Alterians were way out front when playing on Normal, so I took a close look at their racial bonuses and I saw they were "fast" (fast expansion), clever etc, so I matched a couple of their traits to my custom race.

Here's what I've tried so far:

1) Given my custom race bonuses to speed, research and production. (expand quickly)
2) Got planetary improvement immediately so I can start putting xeno farms out quick
3) Tweaked my planet build queues to place priority on xeno farming, research and production (in that order)

Typical early game planet build queue:

Xeno Farm
Factory
Research Laboratory
Factory
Research Laboratory
Factory

(wash, rinse repeat)

4) Put a xeno farm on every planet
5) Used max speed to speed up early empire expansion/conquest
6) Placed heavy priority on colonization tech trees to keep research and production out front of everything else
7) Used "rush build" as much as humanly possible in early game to speed up expansion by pumpiing out colonizers and constructors
8) Doing manual moves on all exploring ships in order to make exploration efficient.

Yes, I put a lot of pirate bases on the map (I think I picked "common" for pirate bases) and that seriously hinders my expansion because I have to avoid them until I can start dumping points into military in order to fight back, but I would assume that the AI has to do the same thing, right?

Anyway, it's obvious that I am doing something terribly wrong here, probably with my planet management, so if anyone has any tips or tricks to at least MATCH what the AI is doing so that it's a fair fight, I would be most appreciative!

Thanks!

NOTES:

Map Size - Insane
Difficulty - Challenging
Number of Opponents - 10 major race (2 custom), abundant minor factions