I believe you'll find some answers here https://forums.elementalgame.com/437102

For ElementalDefs.xml you need to copy the entire file to /Mods/ folder and then change it. You can't take just a part of it to edit.

Coreworldresources
CoreShards
CoreWeapons
CoreArmor
CoreItems
CoreQuests
CoreUnits
CoreUnitstats

those you should only copy what you intend to change or add

CoreAbilities
CoreImprovements

those are special, when you re-define an existing type the old tags are not forgotten. See https://forums.elementalgame.com/434780

CoreSpells also see the link above

Treatires, TaxRateDefs and Wildlands I don't know.

Just so we are on the same page ,the /mods folder should be in My Documents\My Games\FallenEnchantress\ not the installation directory.

I don't believe that you can give a faction +2 sovereign points as a faction trait. You may be able to tie it to the blood trait by giving it a cost of -1, although I haven't tried that.

1) You can have an item restricted to a faction or a race for unit design and the shop, but there is no good way to limit a random item found in loot to Mechos only. You cannot use the bloodline as prerequisite, items only accept the unit's level as prerequisite for champions.

2) Only if you put it in at the unit's creation (unit design/custom sov creation). Otherwise no.

3) The easiest way is to give your faction a new faction ability. For example the Scrying Pool improvement has this:

        <Prereq>
            <Type>AbilityBonusOption</Type>
            <Attribute>Enchanters</Attribute>
            <Target>Player</Target>
        </Prereq>

which links to this in CoreAbilities.xml

    <AbilityBonus InternalName="EnchantersAbility">
        <AbilityBonusType>Player</AbilityBonusType>
        <AbilityBonusOption InternalName="Enchanters">
            <DisplayName>Enchanters</DisplayName>
            <Description>Unlocks the Sindarian Staff, which gives additional Dodge, and the Leht Staff, which fires lightning.  It also unlocks the Scrying Pool improvement which gives the city an extra Essence.</Description>
            <Icon>Ability_Runemasters_Icon.png</Icon>
            <GameModifier>
                <Provides>Unlocks the Sindarian Staff, which gives additional Dodge, and the Leht Staff, which fires lightning</Provides>
            </GameModifier>
            <GameModifier>
                <Provides>Unlocks the Scrying Pool improvement which gives the city an extra Essence</Provides>
            </GameModifier>
            <Cost>1</Cost>
            <HideWhenUpgraded>0</HideWhenUpgraded>
            <Type>Army</Type>
            <AIData AIPersonality="AI_General">
                <AIPriority>5</AIPriority>
            </AIData>
        </AbilityBonusOption>
    </AbilityBonus>

and it is applied to the Pariden faction in their CoreRaceConfigs.xml

<SelAbilityBonusOption>Enchanters</SelAbilityBonusOption>

Unfortunately both RaceConfigs and AbilityBonusOptions are not overwriting properly right now from the /mods/ folder.

Instead of trying to change the existing faction abilities, why not create a new one instead?

Because of the bugs above I really can't think of a way to do it from the /mods/ folder.

The best I can think of would be to give them a cost of 5000 points or so.

In CoreRaceTypes, i see the special units (slaves, henchmen, etc) coded in, and nowhere do i see the "train henchmen" ability to indicate a connection between Train Henchmen and Henchmen units.

I was hoping to grant a list of monster units (instead of human ones) to a trait and hook it to a bloodline...  Can a monster unit be made to equip items?  Can a champion or sovereign be an elemental or dragon?

Hopefully this will reduce -10% exp to level up from all units trained by said faction.

Now, both of these should be worth taking.  I considered using the values of "Trainer" or "Bard" however i realized giving each unit that could get out of hand.

So i can not make the Binding Elementals, and various demons wear armor or weapons. I won't let it ruin this for me, instead i will give this faction some other bonus.  Some factions can not use ranged weapons or armor - perhaps i should design this one with the idea that it won't be able to use either up front and instead give these units a few abilities such as bash, maul, or a few spells. I could even give a few special buildings that add bonuses to units.

This feels a lot like D&D.

This is part of what i like about FE - there are other ways to do almost anything. 

Yes, UnitStat_ExpToNextLevel is a "wrapper". Those are calculated unitstats, you cannot modify it. To boost experience, use UnitStat_ExpBonus. Although I'm not sure how to implement it for free for all trained units to get +10% experience... other than to make an accessory item.

I don't recognize "Training" in that context.

We used to be able to apply a trait to all trained units, but I just looked it up and it's not working anymore.

Perhaps a spell that you cast on all your cities? That could give all trained units from those cities a trait.

If this were any other stat than experience it would be a lot easier. It's very easy, for example, to just give a faction +10% accuracy. But experience is a bit tricky since the ExpBonus unitstat is 0 from the start.

Would this work? ToughEmpire and General provided the idea for it.

I am a little lost on syntax, which of these has what consequences? I am trying to make "every army" have +3 defense, not every individual troop. I can live with this being a sovereign ability that applies to his army but prefer to make it a faction ability that applies to "all armies".

We used to be able to apply a faction ability trait to all trained units, but it doesn't work anymore. I can't think of a way to automate it.

I haven't tried that, but I do happen to know WolframAlpha did just that in a mod the other day for a trait owned by a champion.

Sounds like you are heading into that territory where no one has ventured before.