This seeming disadvantage is offset simply by the fact that as a collection of islands, it's extremely difficult to 'take out' Naples. Naples will, however, always have two permanent strategic points to defend, irrespective of the positions of factories and mills. The major policy decision for Naples is Italy and what to do about it. The only two viable options are alliance or war, there is no real room for a middle ground. The choice between the two is as much a matter of personal style as long-term military strategy.
War is the more dangerous, but potentially more rewarding strategy.
A war with Italy early in the game, will usually be won by Naples as all you need to do is take out his mainland territories whereas he has to take out, at the very least, Sardinia. The earlier in the game the better, because then Italy has had less time to build up a fleet which can feasibly be used to launch an invasion force. If you do wipe out Italy then your economic situation has changed somewhat. You will now have two ore mines, two gold mines and lots of potential sites for mills and factories. Militarily, your options have now changed as well.