At this time war is the only diplomatic status that can show that two realms experienced a fall out and consider each other enemies.
Positive relations are more nuanced. Peace is something generic. You can have peace with everyone. Alliance is heavily restricted. You can't be allied with that many realms. Federation is something unique.
I suggest to mirror this system to hostile relations:
Federation - Alliance - Peace - (Neutral) - Hostile - War - Hatred
Here we imply that realms who are hostile to each other are not in a state of open war but still consider each other enemies. Hostile realms will be able to arrest passing nobles, launch border raids and looting expeditions, get involved in underhanded activities (more options for spies and priests on hostile territory). War will be what war is now, with perhaps additional restrictions in time. I think realms should not be able to maintain War indefinitely and at some point revert back to Hostile for a while. The main difference of war vs. hostile would be that only during wars you can take over enemy regions.
