Friendly-fire dragons are a nontstarter.

Your other points are interesting:

1. Scaling effects based on funding level. Cool in concept depending on how it is scaled.

2. Diversifying cost to include soldiers, food, etc. I've always liked this idea. I would favor requiring some minimum of each resource, at least gold and food. Knock down the gold cost 10-20% and require some insane amount of food, like 500 bushels per KD acre or something.

3. Even further refinement: have DURATION depend on food donated, with minimum donation of 100 bushels/KD acre for 48 hours and max duration of the current 120 ticks for, say, 1k bushels/KD acre. Then have STRENGTH scale the same way, with a half strength dragon starting at around 75% of current costs scaling up like rituals to max strength and beyond (and with severely diminished returns on over-funding).