How are start locations determined in Civ 5?

I have been playing Civ 5 on difficulty 5 for a bunch of AI's, FFA style. I am having issues getting a good foot hold in my games. I feel as though the other players are expanding towards me first, cutting down on my space to grown. This wouldn't be so bad but it also appears as though I always start within 15 hexes of another player. I have tried playing with 'disable start bias' to give myself a better shot with the random placement but I am not having any luck.

How are these initial positions decided? Are there settings I can setup to give myself more space at the start of the game?

Start with a bigger world? If all you want is room to spread out. In Civ 5 there are actually reasons not to want to spread out so much, if you want to go for culture instead. 4 cities with decent resources is plenty to get you to the modern age, with the added advantage that you'll have 4-5 more social advancements than your rivals. Just don't alienate everyone, so that you're able to trade for aluminum and uranium.

Remember that on difficulty higher than 4, the AIs cheat. They will have more settlers, workers, and military much faster than you do. You can't beat them in the early game just by outbuilding them, you need to out-think them as well. This is where diplomacy can come into play; if you can trick the AIs into starting a war with one another, it does hurt their economy (not as much as it would hurt yours, but a little).

You could also try setting it to archipelago which usually results in every player being on their own little island.
This should make the game a little easier by giving you more time to prepare.