There is no galactic conflict, that doesn't mean there is no conflict in the galaxy. I can think of plenty of reasons for the manufacture of battle capable droids, along with plenty of people who might purchase them.
I agree showing them suffering lends more weight to the problem, but I feel the need to point out that your video example is flawed. The Mandalorian Blockade blocked ALL of the core worlds of ALL raw materials, including food. One would think a planet would be inclined to riot if they are getting no food, but they may not be rioting if the blockade only prevents the import of the Star Wars equivalent of an iPad 2 and Droid Razors. Naboo is a fertile planet so food may not be a problem, but industry would suffer if they can't trade off world, leading the "riots" to be nothing but grumpy people sitting at home that they have nothing to do.
They are doing it to protest taxes on trade routes, as said in the beginning of the film. Sidious could have convinced them that doing this to Naboo would help their position.
We generally only see the palace around Theed, where the general population may not be allowed. When we are in the main parts of the city it's either for a battle, or the parade at the end (and the parade is packed with people).
So you're ok with making the assumption that the Trade Federation knows nothing about Palpatine/Sidious but not ok with assuming that Palpatine/Sidious could have shown them evidence that he has pull in the Senate?
The invasion is because the Blockade is not legal, so by having the Treaty signed it would legalize the whole issue, saving them from any issues with the Republic.
Making your own logic jumps within a story isn't evidence of bad story telling. Bad story telling is when the writer must spell every tiny detail out for you concerning everything. While PM didn't have great story telling (or even good story telling) most of the issues within the story can be worked out if you think about them.
Now if PM came out first, as opposed to a New Hope, I would have a vastly different thoughts about it. As a stand alone movie (not part of a series where we know what happened) it's bad but it's not a stand alone movie.