Civilization 5 – Does the AI Recommend Founding a City on Resources?

This is a graphics bug. It was supposedly fixed during the october patch -- have you installed it? Specifically:

Map – Terrain caching fix that could cause problems for certain video cards (the "glowing red orbs" seen on the map are an indicator of this).

Declaring war might just be enough. If you can do damage to their military while they're on the offensive (via defensive unit placement on your side and strategic coastal city harassment on theirs), you'll probably end up with a net decrease in their overall science/space production. The CPU will also prioritize building replacement units, even though you are both very far apart. If you set up adequate defenses on your end, even if they come knocking their military won't be able to make much progress.

If you can get a few other nations to join in your fight, they might make the war a little more "real" and bear the brunt of the harassment. You can also use allied city states or Civs as a staging ground, as you suggest. However, you'll have to be careful that your allies don't lose, thereby causing Russia to grow ever more powerful.

I wouldn't bother trying to take territory from them unless you can really cripple their military first - and they'll probably be begging for mercy by that point. As you've noted, trying to land enough units to make progress is going to be painful.

I'm not much for nukes personally, and it's possible that if there are multiple Civs in play that they will ally against you if you commit multiple nuclear atrocities, which could end up giving Russia time to rebuild while you fight a multi-headed war. Desperate times, though...