Durandal - no, I know I do not NEED that many troops, but like Pokemon, I just gotta have 'em.
Atm, I have roughly 240 Swadian Knights, 80 Lancers, 300 Swadian Sergeants, 150 Swadian Sharpshooters, 100 Huscarls, etc etc, spread over 2 castles and my travelling army.
I KNOW that's overkill, but meh, I love my soldiers, I do.
As to doing quests for the villages to prosper, well I am not so sure. I did 4 quests for my desolate village, brought them wheat and cattle, killed off a Bandit infestation ...and then there were no more quests.
About 2 weeks in game time later and the village is still poor and desolate and still no quests available.