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http://www.eu4wiki.com/Personal_union#Inheritance
sidenote: Great mod, has saved me much (imho) unneeded frustration. Really appreciate the fact that this mod stays updated, unlike some.
Most likely not, but you can give it a try. It simply adds more decisions and events, but does not overwrite anything as far as i know.
I don't see why it is funny. This mod makes the AI want to become part of your country when you become a new country and you and your vassal share cultures. And the annexation is free.
You are more or less correct.
1) If you choose to annex the nation it costs 100 ADM points and 100 DIP points but you inherit it immediately
2) If you choose to keep it as subject, you gain 2 diplomatic upkeep, 1 reputation, and the subject gains 20% development discount, 10% lower reduced liberty desire, but 2 unrest as the people being upset for being rejected to join the union.
In any case if you annex a vassal, the event does not come for 10 years (from any of your eligible subjects), but if you reject, they cannot ask for unificiation for 10 years.
I could, I just don't want to. These decisions and events are already way too powerful, and that would already be too powerful. Don't forget, that nationalism and nation states have not started forming until the second half of the 19th century.