My proposal: Make infrastructure lost during war damaged, not completely destroyed. Attacks would do the same infra damage, but only 20% of infra would be completely lost, the other 80% could be rebuilt for a cheaper amount (say 60% of normal price?). Additionally, 'damaged' infra could slowly regenerate itself over time at the rate of ~5 infra per turn per city.
Before people shit on my numbers, these are numbers which would change depending on balancing and what Sheepy thinks would work. I only use these numbers for the purpose of being able to demonstrate how it may work.
So, during a war, a 12 city nation with 1800 infrastructure, takes 600 damage per city in infra during a war. Under the current system they would have to completely rebuild their infra that they lost, which without alliance help would take about a 2 weeks- 1 month to completely rebuild. During this time all growth is stunted, and their progression in the game stops. What i propose is that instead only 120 infra would have been permanently lost per city (the top 120), and 480 infra would be in a 'damaged' state. While in this damaged state it doesn't provide population or income, and essentially acts as if it's been destroyed. However, as soon as there are no active wars with this nation, the infrastructure starts to slowly rebuild at 5 infra per turn per city. If this was left to happen, then the natural 'fixing' of the damaged infra would take 96 turns, or 8 days. Alternatively, the nation could pay to fix the infrastructure, to speed up the process, but the infra costs a discounted rate compared to what it would otherwise be, so for instance it would only cost 60% of the usual infra price to rebuild their infra. Moreover, at higher tiers more infrastructure is destroyed, and so it would take longer for infrastructure to be rebuilt at this level, but not the same excessive amount of time.
This way war is still damaging to the loser, and would slow their growth down significantly, but equally it doesn't put them into a state where they are taking months to rebuild infra to pre-war levels. This will still causes the losing alliance to have to spend time rebuilding, as the most expensive 20% of infrastructure will still have to be completely rebuilt. If Sheepy is going to try and make wars more frequent and less damaging/expensive (to encourage more wars) then this is a possible way to do it.