Romeo, I think I would have settled by the coast, probably just 1 tile north of where you settled. This would have gained you coastal access, which I find very important in Civ4, and wouldn't have wasted some sea tiles, as you said yourself. Also, I have a hard time spotting resources without... the resource feature of course. But it seems this move would have claimed some fish/crab/clam in your capital city's vicinity (but you wouldn't have known). But then again, city placement is a bit more complicated (at least for now), so I could be wrong. I myself settled that way in my latest game, so...
Anyway, good luck to you !
