Seems I may have found the source of Paragon not reducing your Sovereign's HP - it was reduced when the Sov and target champion were by themselves, but didn't drop when they were in the same army.

Also, since XP boosters still seem to effect the outcome - consider that with General, Trainer bonuses on sov+2 champions averaging +25%, Potential I-III for +60%, Knowledge, and henchmen with Bard & some Trainer for another +40%... thats +225% XP, giving nearly three levels in a single casting!  And you can boost the results even more than that!  Seems like there needs to be some restrictions, since a Level 50+ champion with a lightning mace/pike and the +1 dodge/level trait is basically unstoppable.