I started playing some battles with only 2 unit stacks for certain reasons. Xerxes in Montero dungeon has an army consisting of 14 Cyclops & 1400 Wolves. When fighting him with an army of 1 or 2 stacks of units his stacks are arranged as 2 stacks of 700 Wolves & 1 stack of 14 Cyclops. When entering the battle with 5 stacks his stacks are arranged as 4 stacks of 350 Wolves & 1 stack of Cyclops.
However another enemy group consisted of 4 different stacks of units. They always appeared as 5 separate stacks in battle, no matter if I entered with 1 stack of units or 5 stacks.
I get a pretty good feeling that when possible the stack arrangement of the enemies tries to correspond with your own arrangement.
I remember reading a post somewhere on here from a guy boasting about how easy the game was to beat no-loss on impossible and giving a few brief descriptions of how he played. He said he played many battles with just 1 or 2 stacks of units, which sounded impossible, since after all if you get 1-2 attacks per round and the enemy has like 5+ stacks getting so many attacks per round how can one survive such a gang-up. So I see now how he would be able to do so well with so few stacks. Like you said, fighting against fewer stacks grouped together made it easier.
It's like how the Griffin has an talent to split apart. That is somehow a beneficial thing. I remember the battle against some pirate guy the crown gave me a contract for. He was the one in the pirate cave on Debir on top of the hill. He had a bunch of Griffins. First he moves the Griffins up next to my army. Then he splits them all up so it looks like a very imposing scene of Griffins everywhere. It would be cool to see an enemy start a battle with like 10 large stacks of Griffins and then do the same thing, split them all up for an imposing display.
Just a side note: the same chest is there both times, just in a different location.
As a Mage with higher magic, a dual fear spell and this "invincible" hero battle is reduced to very weak.