In the case of Greeks attacking Greeks or Celts against Celts, the diplomatic modifiers still hold true because you are causing a regional instability. The same reason why historically Epirus has a poor diplomatic standing with the Greeks is because they wanted to

with the Greeks. What this also does is if you are threatening to unite all of Greece under one banner, i.e. monopolize the balance of power, the remaining factions will despise you. The same way the Greeks despised the expansionist Macedonians under Phillip II and Alexander. Of course in the case of Greeks attacking Greeks there would still be an overall better rating because you share the same culture is a positive modifier. Whereas, in the case of a Roman attacking Greeks, they will be quickly hated because they lack that extra bit of bonus.
The diplomacy rating could also compute where the military action was taken, it would be nice. For example, if I am Sparta and Epirus invade Sparta and I am defending my settlement, I should really not suffer a negative diplomatic modifier for military action against Epirus, after all I was only protecting myself not attacking them, self defense. If I go on the offensive, I should be gaining negative rating pretty quickly because the expansionist mentality should quickly rack up military actions debuffs. For example, if I am at war with Epirus that has a good standing with Macedon, I should not decrease my image in front of Macedon, if Pyrrhus invades Sparta and I defend it (hence, military action taken against an army of Epirus in Sparta). It should be neutral, granted Epirus should get a negative modifier from all Hellenic factions for not respecting national boundaries. However, if I take the offensive and take over Larissa or conduct a raid or a blockade of Larissa, Epirus's rating should not suffer by instead my rating will suffer. This will prevent me from blitzing out factions for fear of other culturally associated cultures declaring war on me simultaneously.
Also the negative modifier for attacking a culture should vary depending on the difference between the culture. Sparta would be less opposed to Epirus occupation than to Roman occupation than to barbaric occupation. This makes sure that if your culture is entirely different the resistance you meet from the culture you are at war with will be higher and the chances of coalitions against you is also higher. Wow, I should have started off with that, sorry for making you read this wall of text.
Again this is only an idea. My ideas are usually never regarded probably because they are so far fetched, and unattainable.