Taking a capitol will not cause the other province of that nation to join you.
It will give them a morale penalty which could trigger revolts.

holding troops inside an enemy border will give a morale loss in the invaded province, yes.
This was correct the last time I checked this^

Not that I have seen.

I do believe occupied territories are held more often with larger force, but actual revolt % is the same

I believe you misunderstood slomoney. The question was whether putting more troops to sit in an enemy province gives a bigger morale penalty to the province. I don't think so but never tested it. Also, more garrison troops do reduce the chance of revolt, down to 0 if one has any sense.

Personally, I think NWE Alliance's scheme would be a painfully slow way to try to capture provinces, and they might go to a third party anyway. When an enemy province revolts it could go to anyone nearby.

This seems like an awful waste of time to me. The problems?

1 - Their capital is already GONE, making it hard for them to gather resources to build more troops
2 - You are going to sit there waiting for days on end, for a province to revolt? While the percentage may be high, I think this % is generated but once a day, at the end of the day.

So you're going to sit there, wait on 3 or 4 provinces, when it's going to be far easier to gather up your forces and eliminate the problems? After sacking someone's capital you should have plenty of resources to rebuild troops, as well as build up your kingdom to support a long term war.