Can someone please explain to me the actual impacts of citizen morale/happiness?
The major thing it does is affect your population growth. 100% morale will double your reproductive rate, 75% morale will give a 25% increase, anything down to 40% will have no effect (normal rate), and if your morale drops below 20%, you will lose population.
If and when you research the higher forms of government, low morale can cause you to lose the vote in your senate, in which case you will lose any bonuses that your chosen form of government gives.
When invading a planet with low morale, you can use 'information warfare' to get a number of citizens to join your cause and fight with you. The lower the morale, the greater the number of turncoats. The AI can do this to you as well.