You could also tie this into Septimus Signus: place a gatekeeper at each entrance to this Black Reach. But the problem is that the game's AI doesn't know how to open them...
Regarding the mentor: in Skyrim, the Dragonborn is sent to the Greybeards on High Hrothgar for a reason....
Therefore, his place is still on the surface.
Regarding buildings for unit growth: in Skyrim, the Dragonborn can be accompanied by companions. Therefore, you could place a dwelling for units of levels 2-3 in each city.
Of course, all of this is up to the author.
I'm slowly playing through the map as a vampire. The map's landscape is well-copied from the original Skyrim. Mountains, swamps, snow...
I liked it.