In the early game, it is unwise to expand too quickly even though cities are the single biggest source of income for VCs, their armies in the early game are weak, and not well-able to defend newly-seized territory.
VC Uninhabitable Climates are those uncivilized areas of the map like the Wood Elf kingdoms to the west, and anywhere with too much Chaos Corruption. This is another good reason to leave the Dwarfs alone until you can afford it.
VC Unpleasant Climates include other nearby race-nations such as the Dwarfs (mostly east and south).
For some reason, so are many of the Greenskin settlements to the south-east. VC Suitable Climates are anything human-based, including the Empire and its Provinces, the Border Princes, and the Bretonnian Kingdoms (mostly west).