Sounds interesting. I'm still thinking about the idea of learning other races' technology and adding it to your own, but your train of thought also seems pretty neat. What if, you had to do things to keep both cultures happy? Monuments would quell the human morale needs, but maybe the Masklings would want mini-totems all over the place? Those would be the negatives of a 2-race settlement, but maybe if it allowed you to use both structures, it would have some rewards too?
Also, maybe the more masklings you have in your empire, the better diplomacy will be. It would be neat if that was represented in the world map sidebar. It would show population, then individual race's population (If there will be more races added in the future) and the percentage of your population they make up. It could effect their opinion of laws, diplomacy - even trade could be affected if the new races brought new resources and structures to the table.
Then when the AI empire comes in, your main advantage is really that you have the technology and resources of multiple races forming one large empire, a borg-style utilization of everything you can use to bring down the enemy, who would probably just be busy destroying anything it comes into contact with.