Also, I set the space pop cap to 120 for every faction if that would cause any serious issues
It definitely changes faction balance, and does so in the NR's favor I'd say. With how spacing works in EaW, if you can largely fill the screen with ships, then quality will beat quantity every time, as the quantity advantage can't actually be brought to bear - there's a limit to how many ships can be in combat with each other at any given moment because you can't just cram everything you have into firing range.
Think of the Battle of Thermopylae, or really any famous battle involving the ancient Greeks. The Persians had a massive quantity advantage, but because of the terrain, they couldn't bring that advantage to bear, so the 300 Spartans and assorted other Greeks were never at any one point truly outnumbered. This allowed their advantage in quality to be decisive during the first couple days of fighting, as the Persian troops simply weren't equipped or trained to the same level, so the Persian troops that engaged the Greeks head-on were slaughtered.
It's pretty much the same thing here. If the NR can't be effectively outnumbered by the Imperial factions, it will win just about every fight, because pound for pound they have better ships (especially in later eras). Fighter swarms can't be limited this way, so theoretically the Imps should be able to at least win the fighter battle, but the AI is terrible at concentrating its fighters - so it can't really take advantage of this, and NR fighter quality will mean that an NR player should be able to establish fighter dominance as well.