... what would you do?
Don't even base it on the current situation, start thinking from scratch. The current way strat battles work is a very simple one, and I'm sure there would be funnier and tactically more challenging version.
Just think about it like this:
Input: 2 parties, different troops, different weapons, fighting on different locations (villages, castles, towns, plains)
Ingame Battle: ?
Output: 1 party wins.
How should the battle be fought?
This is just a brainstorming really, I'd like to hear how you would do it if you could decide.