That was awesome to read the first post! Good job on developing!
I would like to add my opinion that I actually LIKE
that slow decline of Sturgia and the empire factions over time. It feels more connected to the lore of Mount & Blade. You all know empire is fractured and slowly erodes with time, while Sturgia lose their northern settlements to the Nord invaders, (which in turn brings their own culture) and at the same time the Sturgian evolves their culture into Vaegir as the Sturgians supposedly(?)
blend their culture with the battanian refugees/forestmen.
I understand that it's not nice to see four remaining strong factions at peace in end game, that is where civil war mechanics should come into play at the end game content. Vlandia are famous for infighting, Khuzait lose power to the Khergits, Aserai assasinates and eventually is led by the Sarranids etc. There is potential in engineering Mount & Blade history (aside from player influenced end game) to be roughly transitioning from "dark" (bannerlord) to "high" (warband).
I for one would like to see Nords as a faction appearing if some triggers are met, i.e. Sturgia have less settlements than x, taking on refugees decision, sturgia cheftain slain in battle, 10 years have passed, etc