B17,
I no longer put Spears or Bows into my offensive armies. I use Spears and Bows exclusively for defensive missions - city defense, siege support.
I use T2 Swords as my primary offensive army to kill NPCs. I will often assign a Spear or Bow Commander to lead the Sword Army so that the defensive Commander can earn XP and level up.
edit: Also, as to number of losses...It appears to me that the hard number of units lost by the attacker is unrelated to the number of units in the attacking army. If the defender will kill 25 units, it will kill 25 units from a 50 unit attacking army just as it will kill 25 units from a 500 unit attacking army. So adding more offensive units does not reduce the number casualties suffered by the attacking army. Hence, my decision to not put defensive units in my offensive armies.
As to managing replacements - Your choke point is your Blacksmith. I have upped my Blacksmith to increase production rates. Also, calculate the balance between Sword production and Chainmail production to ensure that you will have 2 Swords for each Chainmail produced. Now calculate how many Stalwarts your economy can produce daily. Now you know your daily loss limit to maintain a static army size. I use a loose rule-of-thumb that I will loose a number of Stalwarts = to 50% of the defending NPC army - often the rate is better than that - depending on the NPC composition.
So with these ideas, you should be able to manage your losses so that you can continue to run missions and also grow your armies.
Edited by The_Dude - 30 Nov 2010 at 19:25