This is really fantastic Alex, no complaints on my end!
One question about procedural generation, how is faction control of neighboring systems decided? Is it the default where all factions dominate the space around their core worlds? Or is there a stat that controls what percentage of nearby worlds are controlled by that faction?
Just to throw an idea out there, but market stability seems like a particularly great way of controlling procedural generation of who gets what. More stable markets already produce bigger fleets, why not let it also control the chance that a faction dominates nearby space as well? It also lays the groundwork for faction politics/conflict later on. Markets with marginal stability (2 or less?) would be prime takeovers for more stable (read: powerful markets). Add in some temporary market conditions like "Military Defeat", "Trade Boom", "Epidemic", etc., and you've got a fantastic way to have a dynamically changing sector that the player can influence.
Kill a bunch of a faction's ships? Nearby markets from that faction gain a temporary "Military Defeat" modifier, reducing stability and making them prime candidates for a military invasion, internal coup, or further negative debuffs. Trade a lot with a given port, and it becomes prosperous? That port gains increased stability, and a chance to quietly buy out and take over neighboring markets with a "Trade Disruption" event. The player should get a mission/event to interfere when these types of high stability/low stability takeover events arise (you only hear about these if you've tapped a commlink or gotten friendly with the factions/people involved). For instance, you could prevent a buyout with one of your own/friendly faction's (either hard cash or badly needed goods), or perhaps wipe out an invasion fleet en route to a planet. Really, the possibilities are pretty good here.
Even better, give factions certain flavors that biases what events each faction get. The Hegemony might gain better chances at/more military takeover events when piracy is rampant, esp. against independent worlds incapable of defending themselves. Meanwhile, the Luddic Path might do particularly well at internal coups on worlds sympathetic to the religion or events that cause widespread public dissatisfaction. This might give each faction a bit more of a preferred playstyle and added flavor.
Anyhow, cool stuff!