the higher level heroes really seem UP. right now it seems optimal path is for at least one of your first heroes to be a commander to get the unrest bonus, but the higher level heroes you get later in the game- they just aren't powerful enough to compete when you get them, so you end up giving their eq to your real heroes and sticking them in a town.
Two suggestions:
1) Assassin/Warrior Heroes get +1hp/lvl Defender +2hp/lvl.
2) level 5 heroes get potential I free, and 5 traits
3) level 7-9 heroes get potential I-II traits, and 8 or 10 traits respectively.
4) Higher-level stuff needs to give more XP in general.