Why does Jowy try to assassinate Riou instead of suggesting political union? If his goals is to end conflict by joining Jowston and the Highlands, and your best friend is leading the opposing side, wouldn't it be smarter to become allies rather than prolong the war and kill your buddy?
Which particular assassination attempt are you talking about? IIRC Jowy does try several times to get Riou to surrender to him. He wants an alliance all right, but with Highland in power, possibly because he sees himself as a Highlander.
Given the history between the two nations, I don't see how a Highland-Jowston political union could work. Although it was actually Jowston, through Mayor Darell of Muse, who started the war, they also have suffered so much at the hands of Highland, so do you really think they would just agree to make peace with Highland? No, because they don't even trust Highland's offers of peace anymore.
Basically Jowy had the firm belief that Highland and Jowston had too ugly of a history together for peace to ever last long. He didn't intend to kill Riou though, but he did intend to hold Riou hostage to force the City-State to surrender on Highland's terms.
Anyone care to explain why all endings except the Golden Ending is considered 'soul-crushingly depressing'?
Because in one of them, you go to the mountain where the story started and kill your friend. In the other, you don't go back and he dies alone anyway because of using the Black Sword to seal the Beast Rune. In both of them, depending on earlier events, you are never reunited with Nanami. Admittedly, that last point is somewhat hit-or-miss depending on the player's feelings, but the first half of the answer should cover it well enough.
And ensuring that there is peace in Jowston isn't a good enough thing to make it at least Bittersweet Ending? At least you won't have the likes of Luca Blight running around, the old, selfish Jowston that disgusted Jowy has been mostly reformed or dead, the genocide proposed by the Beast Rune has been quelled, and both Highland and Jowston can finally enjoy a peace together and standing united against the latter 'Higheast Rebellion'. Okay, there's that thing about You Can't Fight Fate... but on the whole States and Highland? That is something insignificant that would be swept away with such thing?
Consider this - In the ending where Riou kills Jowy, he ends up with the entire Rune of Beginning, rendering him immortal (as I recall, Word of God says that the separated Rune of Beginning doesn't grant the same immortality) with the full knowledge that not only are most of the people who are important to him are dead, his best friend by his own hands. The Higheast Rebellion would have happened either way, but now he has to take part in it as well. And he has to take part in the incredibly boring meetings that go with ruling a country.
Indeed, it does suck to be Riou. However, when you look at it on the bigger thing, even if Riou DOES suffer, the world is still saved even if he made a lot of sacrifices and lost things. Calling him suffering with his state, while true, but ignoring the state of the world which has gotten better sounds incredibly selfish. What, in that ending Riou should've been thinking "If I knew this would happen, I should just let Luca & the Beast Rune run loose so long as they live!"? Riou is pretty selfless, you know. I realize that things would've really sucked for him in those endings, but considering that the state of the world can enter a state of peace that even after Higheast Rebellion, peace would still last (except with Tinto becoming Tinto Republic), that puts it on a Bittersweet Ending territory: Victory at a cost.
I wonder if there is an explanation beyond "We don't have enough game spaces left!" about how neither Neclord nor Hix, Tengaar or even Tir (if you bring him along, it's possible) to recognize each other. Even if Neclord can pull But for Me, It Was Tuesday because it's the doppelganger that was in Toran, Neclord was an important part in both Hix and Tengaar's lives, because Tengaar's abduction by Neclord was the thing that spurred Hix to become a warrior, it was a mandatory quest in the first game, not optional. Tir was also there to screw up with his plan instead of just sending Viktor alone (though that was what happened in the Drama CD), but for the three to just treat Neclord like 'just a new threat' instead of an old familiar face is... kind of confusing. The most we can get is Neclord being mentioned in Tengaar's first investigation, but aside of that... nothing else?