By the middle/end game your best army will be a stack of champions. I'd like to see champions being important additions to armies rather than armies in their own right. Here are a few suggestions that may help to get this balance right (some of these have already been flagged but I wanted to bring the ideas into a cohesive list to keep armies important):
1. Introduce a new XML property called 'areaDamage'. Normal weapons would have <areaDamage>0</areaDamage> and a hit with such a weapon would only apply damage to one member of a group. This would allow parties such as spearmen etc to survive longer in battle. Drakes breathing fire and some other magic spells would have <areaDamage>1</areaDamage> where it would work as it currently does with the whole group absorbing the damage and the possibility of multiple deaths.
2. Have another XML unit property called 'stackFactor'. Trained units would have an stackFactor of 0; champions would have an stackFactor of say 4; and the sovereign would have an stackFactor of say 2.
Another XML property applied to each stack called 'stackLimit' would be the stack limit. Let's say the default for this is 10. That way most army stacks would have 2 champions and the rest of the slots filled with troops (8 stackFactors). Your sovereign could be added to bring this to the allowed 10 stackFactors.
This would also bring in new possibilities for some special units such as Drakes having a stackFactor of 6 so only one champion can be added to that army. It would also help with having some items reduce the stackFactor (eg. a tome on Army Logistics that reduces the stackFactor of the recipient by 4). Some factions may have different default stackLimits.
3. Nerfing the XP has already been incorporated in this release so that champions don't get too far ahead - but this on its own doesn't really solve the problem.