Playing with the characters from the base and the Dark City expansion for Citadels.
I think that your statement concerning the combination of the cards is fairly accurate. If I had to do it, I think I would come up with the same result (except the last point that I will develop). But as it has been said, this variant has some drawbacks :


Increasing the chances of an attack by adding 3 offensive cards (Witch, Magician, Diplomat) out of 7. In my experience, I love Citadels for everyone want to avoid the dreaded attack at the wrong time that will ruin your game. Increasing the number of offensive cards is not a good point. Again, this is only my opinion, and I have never tried this variant. You may argue that this could be slightly compensated by adding the Artist and the Queen, but you then have to decide how you know that the Queen is next to the King (placement of characters in a player's own courtyard).
Modifying the balance between colors. Of course, if you have 4 red buildings, it will be very risky to choose the red characters, but if several players manage to focus on one of the two new "unbalanced" colors, the game will simply shift towards a game of luck : whoever manages to get a huge amount of coins then take the "cards" characters. This is like in the normal game, but will become slightly more hectic (which is not bad per se) and lose some balance in the colors.
The King/Emperor, according to me, loses all interest because of the combos for the other two colors (and the fact there are more green buidings). It may depend on the rule for distributing the characters on the next turn of course. As I see it, you have two options : you make players choose a first time for their first character and then a second time. What you can do to reinforce the power of the King is make players choose both characters at the same time, but I'm concerned about the general balance of this method.
To avoid the conflict with the King, one could propose that the Emperor picks in Second whatever place he's at. It would also help solving point 1 by adding a non-agressive card.


In conclusion, I would say this variant is certainly interesting but would create some minor balance issues that can be solved by some tricks that I mentionned. But it would be interesting to hear from people that actually have tried something like that.