Ok, just so this thread can serve as a reference to others and just so I can get this all down without my brain exploding:
1. Back up the following files: troops.txt, parties.txt and party_templates.txt.
2a. Download Troop Editor 1.5 here: https://www.mbrepository.com/file.php?cid=3&id=709
2b. Directions for Troop Editor 1.5 here: http://forums.taleworlds.com/index.php/topic,34154.0.html
3. Use Troop Editor to edit the statistics of the heroes of your choice.
4. Optional - Turn off Relationships (see addendum 1 below)
5. Configure screen (before hitting play) -> advanced options -> 'allow edit mode'
6. Start a new game, go to character screen, cycle through until you find the heroes, then edit their visual features.
7. Save game, then turn off 'allow edit mode'.
Addendum 1, Optional Step 4 - Disable relationships and keep your troops from whining: http://forums.taleworlds.com/index.php/topic,46630.0.html
Addendum 2 - Not really a part of this but if anyone is reading this in the future I just figured I'd put this in here. Save yourself a ton of frustration and edit the capture rate for enemy lords and the recruitment from villages. The game is currently flawed in the design and forces you to engage in boring, repetitive, and time wasting behavior by making lords escape 60% of the time and by making it so half the time you go to one of your villages it has troops you don't f'ing want. Fix it now and save yourself the misery.
Capture Rate: http://forums.taleworlds.com/index.php/topic,37023.msg958292.html#msg958292
Recruitment Faction: http://forums.taleworlds.com/index.php/topic,46290.msg1225750.html#msg1225750