there is quite a big difference between +1 and +3 morale for getting the criticals. That's one of the many dilimmas I faced when playing this great game, whether or not to put demoness in the army with fairies and dryads.
to increase the damage, you need to get the whip (easy to get) and the dagger (I never found it in my first game), and to use multiple weapons, you might have to marry Xena.
For the ranged units, I found spell "precision" at level 3 to be really useful. Other people also suggest spell "dragon arrow"
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