I like the idea of your provinces happiness with you being related to your persuasion level. The more charismatic you are, the more they feel good. Could be a fun dynamic (though, play testing for the win).
There's always a lot to be said for KISS. Still, could be a fun dynamic.
Yes - I agree that the NPC interactions do add character to the game - and I like that. What I don't like is that by the time you get them leveled to about 20th? You become an army creating no-losses machine. I can go grab 80 green recruits, and level them to top tier in like 5 days (if that long), and when I battle, my losses are absurdly low compared to the computer's.
I would like to see surgery nerfed for the player, and buffed for the computer (based on your level). So that their losses aren't so different than yours - still I want to win as a player - just not have battles where I do 10:1 kill ratios. That's just wrong (though the invaders may need to be reduced in number if we were to go this route).