I am a player in Kingmaker, responsible for upgrading my group to the Ultimate Campaign rules (possibly with some Ultimate Rulership as well).
1) The rules for which improvements can share hexes are a bit weird. Taken literally, you cannot build a road or watchtower in a hex with a mine, quarry, or sawmill. However, I suspect most groups play it that these three improvements cannot share hexes with each other, but can with roads, canals, and other improvements.
1a) Farms were apparently originally included with mines, quarries, and sawmills, but removed during development. It makes more sense to include them in that list, otherwise one plains hex can feed your entire country.
1b) Settlements don't count as improvements. They are built using different rules and count against a different build limit. So, yes, they can share a hex with a farm, mine, or quarry. The only justification for counting them as improvements would be if they were in the limited set (with mine, quarry, and sawmill). This seems like a reasonable house rule, but I don't see that it matters much either way.
2) Yes, you can build both a farm and a fishery in a plains/lake or plain/river hex.
3) Yes.
4) I came here looking for an answer to the same question. As written, upgrading a road to a highway can actually reduce your Economy and Stability. (For example, 8 roads upgraded to 7 roads plus 1 highway reduces both Economy and Stability.) This doesn't seem right.
In addition, I have some questions/observations of my own.
5) Watchtower specifically says that it cannot share a hex with another watchtower. Does that mean that other items can share hexes with themselves? Can you have two roads or two canals in the same hex?
