Well, hmm. I suspect that it depends on food quality (I got mine below average when I eat grain) and your charisma/leadership.
No idea what it does, though - everybody fights to the death no matter what. I guess that'll change in next versions.
Well, no - you can only imprison the enemies by knocking the off with blunt weapons - you get told that ingame.
But it would be a good thing to make enemies surrender when outnumbered and outgunned - I already suggested that.
if you have above average morale, your men in your war party will be very happy. if your morale gets really crappy then men will start deserting your party and your gonna be screwed. keep alot of different varieties of food and raid a village every now and then to keep it up. kill some sea pirates or something. those help too.
morale is uused to show what speed your men can travel this is also affected by weather ( rain slows you down) and what time it is( night makes you move slower and decrease the distance you can see) i think this is mentioned ingame.
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