Obviously, he means that as war leader, he's got other lords following him. He can control his own party's losses, but over the course of a campaign, the total army size will still shrink due to casualties.
Actually, I'd consider it seriously unrealistic and problematical if it DIDN'T shrink, otherwise an army with a win or two behind it and a significant numerical advantage could potentially snowball and take over the map in a single extended campaign. The loss of troops (as well as supplies) is about the only thing holding the whole thing in check.
The underlying problem is that armour isn't good enough, so battles last barely any time.
I think this can be balanced a bit better in a few ways:
* Make armour provide much better protection against ranged damage, so that shieldless shock infantry are a more viable choice in the player's army, and can be used to break open shieldwalls.
* Make shields take slightly more damage from arrows and bolts, so the player can eventually break shields with enough arrows.
* Increase the effectiveness of melee cavalry charges so if you send your heavy cav to attack a turtling enemy formation they can do better damage than now.
* Reduce the amount of troops who use large shields in the game a bit.
make shield on back stop 100% of damage instead of sucking hard
Make crossbows use a pavise shield or turn their backs on enemy while reloading
troops on second and so forth rank should look more up to block more arrow fire
Some special archers with shield for more block chance would be great (asking for much i know) (google cretan archers for example)
Troops on first row of shieldwall could crouch if not moving to cover feet
Spearmen thrust atack should be fixed, they move the shield to far from the body, (high polearm skill troops should be able to cover themselfs more while charging thrust)
Spearmen with shields should be able to brace if skill also high