Is there plans to have a NPC population in cities (even if merely numerical, not actually NPC characters in the city), outside of player families?
Ideally, none: If we manage to pull it off, everything is player run. If that doesn't work out, we'll introduce NPCs, but the goal is 100% player driven.
How much emphasys will be on crafting/businesses that are unrelated to combat and wars (aka not wall building, weapons, armor) but more on general medieval economy, as in ale production for taverns, paper/scriptures for the church, food production, pottery, tool making, etc etc?
None and a lot at the same time. As we have no NPCs that you can sell to, everything that is produced must have a meaning. And ideally, everything that is produced, must be used up somewhere to keep the economy going. That's why offensive and defensive objects are just perfect for that: They will always get used up. There will always be fights, wars, and they will get rid of those items that are produced in the economy.
There will still be many intermediate objects, though; There will be food for armies, there will be ale for armies; Having versatile nutrition for your armies will allow them to move faster/further/have more HP/to be decided.
If you want to craft an advanced armor, it will probably take 10 to 20 different economical steps inbetween, and each one will require someone with the right tools, skills and resources to create the best possible outcome.
It's intentional that no one can do everything by himself, trading will be a big factor, and not just external trading, there will be a lot of trading within your own city. But all items come from (more or less infinite) resources, get manufactured by players, and then exit the cycle through wars. By wars, you can seize control of better resources. Increase manufacturing cycles. etc.
I'd like to implement more medieval stuff later (after alpha) to make the economy even more nuanced, but for now it's important to get the basic cycle of resources right.
tl;dr: no NPCs, no NPC economy, therefore, every object will have a meaning.