About the palace - I agree, it's too small and is positioned in a ridiculous location. It was clearly meant to be in the Upper City, but since we didn't get it, they awkwardly squeezed it in. I think there was a line from Astarion saying the palace is imposing on the outside but sadly we don't see that in the game.
When the Emperor tells you his story and you get the sequence in which you can watch Baldur's Gate grow, you can see Ramazith's Tower in the Upper City (where it was supposed to be) I wonder if you can spot Cazador's Palace in the skyline as well.
