And just so you know... I haven't been able to get a single one of my characters to exalted (which I like to call "exhausted") with another city faction until well into their 40's.
Heheh - I have a currently level 47 Warrior who is exalted with all of the Horde race factions and has been since before level 40. Of course I also have dragged him through dungeons wearing a tabard and have completely quested out every zone up to about level 40. Oh yeah, and I turn his experience gains off every so often so I can quest through the zones without outleveling them. It's been a fun project but I know he is totally the exception to the way normal people level. LoL
Anyways - I do believe that the spillover rep stops at a certain point, so ideally you would quest everywhere except the Undead places to get all the spillover rep you can and then go do the quests that specifically grant Undercity rep.
Except for the cooking and fishing dailies, most dailies are level restricted and require you to be close to level 70 to get them. It's possible that Blizz may go back and include more lower level dailies but I doubt it since most players don't spend a lot of time at the lower levels.
The best way to grind city faction rep really is to just get the tabard and queue up for the random dungeons (or have a friend drag you through them of course). It may seem tedious but compared to the limited ways you had to build up city rep in the original game, the tabard method is super easy. (Originally, rep gains were much smaller for quests and there were no tabards and the main method was cloth turn-in repeatable quests.)