First off, I really cannot say that I'm particularly concerned about the balance of custom factions (or any lack thereof). It is very easy to create a faction which is significantly stronger than the default ones, just as it's easy to create a custom sovereign who is much better than the default sovereigns.
Also, Shadowbolt costs 18 mana before reductions, not 8 (although you might be able to get it down to 8, since just by being a Mage you get a 25% reduction in tactical spell costs, and you can improve that with Affinity and some items). Infection, however, does only cost 8 mana. Nor will casting Shadowbolt on a target guarantee that any spell takes effect - while it will make it more likely to take effect, there is a minimum resistance chance somewhere around 5% even for targets with no spell resistance, and trained units typically lack the spell mastery to push it to that minimum chance even if they are facing a zero-resistance target.
I have said it before in other threads about these kinds of things, but if something isn't fun in a game, just don't do it. Nothing in the game is forcing you to do anything, and it's not like this trick with infection is particularly different from just going in with a number of undead units at least equal in size to the army you're facing and terrorizing all but the weakest, then killing off the enemies one-by-one to slowly free up units from terror duty so that they can slowly dogpile frightened enemies. Incidentally, a Mage is the best champion type to support that kind of strategy, too, because a good damage Mage can kill (or nearly kill) one or more units per cast, while an undead summoner Mage (namely, your Sovereign, since good luck getting another undead champion) can summon up an extra unit and then go terrorize something, and that one summoned unit can be the one unit beyond the enemy army size which slowly whittles down that first terrorized enemy. Infection just allows you to do the same thing, but it makes it faster because you can have just one or two units on Terror duty while everyone else beats down the enemy.