Well played! Lots of fun for me to read.
Yeah, the late-game mop-up is a big problem with the vanilla game. Since I'm using the same rules and balance there's no real good way for me to "get at" the problem other than the 20 new events.
HF - been thinking about this... one thing you could consider modding in is city defenders. To me at least, vanilla FE's design choice with defenders as militia, leaves city warfare feeling more like a speedbump rather than knockdown dragout fight. For example, in this playthrough my breakthrough came when I took the Elves Fortress up north. I had to only mildly consider the defenses. City defenses in the last 2 cities were tougher, especially the one that had a catapult, but still, the steamroll advanced. My FP increased drastically once I was able to take AI improvement buffed cities. Being able to easily take bastions of power just feels wrong (i.e. the battle doesn't really feel any different than on a non-city tile).
As a player of Sean's mod, in my last playthrough the AI had bolstered their defenses and it was an army unto itself. His design switched from militia, to defenders. This stopped me in my tracks. This forced me to not even consider attacking the city early or mid game until I had proper techs researched and enough military to attack. Had to build the Maginot line - on the other hand, the damn AI was hammering me into the ground with one of the few strategic spells it uses... the HP debuff. I think it cast it like 16x on my fortress protecting the northern border. That was going to be a game loser anyway (gratz AI!)
Since we don't have city walls, siege mechanics, etc. it makes sense to me to improvise with the mechanics we do have, which is switch the design from militia to defenders. Just my humble opinion to help with the mop-up problem... maybe Derek landed where he did because the game could slow to a crawl, dunno. I'd personally find it more fun with cities that put up a fight. The AI builds the buildings, it gets the units, and we don't have to worry about the AI moving them somewhere stupid, etc. Taking a city feels like a real accomplishment in that scenario.