I surprised at myself for posting this, because I've always believed that the graphics are the least important part of the game, so please work on the mechanics of the tactical battles first, but they just don't look very good right now.
I believe the main reason for this is the size of units versus the tile size, particularly in the early game. It looks very strange for two small units to run to the edge of their tile to get hit. Also, the single humanoid units are seen at such a distant zoom level that we can't really see all the loving art details in the game. This is important, not just from an eye-candy standpoint, but also because we need to be able to see the equipment on the units, since that's how we know what we're facing, since the units are mostly humanoids that look the same except for the equipment you can only see zoomed in.
I don't know how feasible this is, but instead of making huge tiles that can fit even the largest unit, I believe the basic tile size needs to be the size of a single humanoid unit. Then, make large units(dragons, grouped humanoids) occupy multiple tiles. That way units won't have to walk over the their opponent to be hit.
Decreasing the tile size while maintaining the approximate number of tiles between opposing units at start will also allow us to view the combat at a higher zoom level, so we can see the art details.
