Setting up an archipelago would take some work to figure out, but it is certainly doable. Messing around with the elevation mesh sizes (in addition to the aforementioned 4-edge-oceans) should be capable of tweaking things to how you like it. The wiki has a very in-depth article on such things.
Realistically though, island worlds are boring and suck right now. You get no invaders and no trade, and possibly no migrants in fort mode. Adventure mode is boring as well. Sometime in the mid-future maritime trade should come up in development, and presumably along with that maritime war (though how much of this will be during worldgen or abstracted away is anyone's guess).
My advice is basically don't do it. If you want the feeling of an island adventure, a pocket world is a much better experience. Nice thing about a pocket world is that in adventure mode, the world map is small enough to remember, and you get to know historical figures/locations a little better. A long time ago I always generated large worlds, but those typically suffer from the island issue - neighbors are always so far away you can't visit them in adventure mode and your world history is dull and devoid of wars. Does help keep beasts alive though (if you don't mind boring megabeasts with an empty kill roster). These days I've settled on playing mostly on medium island-like worlds. I usually fiddle with things to get a few extra deserts, and much more evil/good areas, and sometimes with the height mesh to get a good feeling shape. These places tend to fence civs in enough to ensure conflict, but are big enough to allow a bit of wilderness (so you get some surviving beasts/titans). That's just my take on things, and perhaps I'm not fully comprehending what you want to do with this particular world.