The problem with shields is that right now, 2handed weapons > 1handed weapons + Shields, by a huge margin. 40 or 50 attack versus a 15 or 22 is a big deal. The whole way attacks and damages are valued need to change. Drastic change. It's just too simple of a system to handle all the different gear and troop sizes. I'm not going to try and come up with a formula that will fix it, that isn't my strong point at all, But instead of had and fast numbers, maybe some kind of diminishing return for armor? Kind of like a side of the bell curve, you get closer to 0, but never approach it, so even if you are swinging a club at a guy in plate armor, you can do some damage.
If you want to fix the problem with making powerful, invulnerable champions, how about making the magic gear cost more than just gold? Want a Elementium sword or armor? Better find some Elementium and a guy able to forge that special crap. Want to hire 100 Champions? Great, but if I was a champion, I would want special housing and a stipend. Royal family can live in the palace, but you have to build a "Champion Residence" to hire a champion. And they need servants, so 5 pop? Also, they need to get paid, so add a maintenance to that.