I've tested a lot of different battle sizes, as far as choosing which troops enter combat when you have more troops available than battle size, troops are drawn in from the top of your party screen to the bottom. Put weak campaign map companions (surgeon, scout, engineer, trader, etc) at the bottom of the list (and I group them with archers), and your main troops at the top. This is tricky when you have a lot of one troop, for example, tier 2 archers. They often make up a third of my army, so I opt to put the higher tier of archers at the top of the list, and the tier 2 near the bottom, so they are drawn in as filler. This is another way to control your parties XP gain in larger battles. Put the low tier infantry troops up first so they can soften up enemies, and get more XP, preserving your higher tier troops.
With the looters/random bandits you'll have to manage in armies, I try to get one of them in my party at some point, and now that formation changes save permanently in game, put them in the 'Skirmisher' group. Use them to screen your archers from cavalry, or have them follow right behind you as you lead a cav charge, to tie up your enemies.
In massive battles, (talking ~1000v~1000, if I am in command I try to opt for a prodding strategy. Take a good place 1/3 or 1/2 way from your spawn to the enemy, use arrow fire, skirmishers, cav, or bring infantry close to bait them, horse archer skirmish and flank them, fight until they break, fall back to your original line, and wait for their push. They do get messy, since all of the infantry/archers are controlled as single blocks even in these massive battles, where they should really be split into multiple groups for the AI to command.