Is there a setting that can produce cities on a peninsula or island, like Tyre or Byzantium?

There is no such setting, but checking the "coast" option occasionally results in a peninsula-like coastline.

Peninsula and Island toggles would be excellent. I think programmatically (without looking at code) a Peninsula toggle would set the coast to take up 60% or more of edge, while an Island toggle sets the coast to take up 100% of the image edge.