UNIT - Creature Balance + Visual Changes

Because a Hydra at tier 5 is nonsense.

I agree. I would even say the changes are a compromise. The melee humanoid creatures were already very powerful.
In general, the reason for these inconsistencies with monster levels is that in Heroes of Might and Magic III, the health and damage of creatures from levels 2-5 usually differed by no more than a factor of two. At the same time, no one really thought about the fact that a 4th-level mage, a 5th-level monk, and even a 6th-level sorcerer existed, or that a Crusader was stronger than a Fanatic and even the same Sorcerer in some situations, and sometimes a Royal Griffin was preferable to all of them. In Heroes of Might and Magic IV, the number of levels decreased, and a paradigm emerged in which a creature of a higher level must necessarily be stronger than a creature of a lower level. In Heroes of Might and Magic V, the number of levels returned to the level of Heroes of Might and Magic III, but the paradigm of mandatory separation of creature strength by level remained. As a result, the Monks, remaining at level 5, began to look strange with stats similar to a Hydra:smile04: How they managed to put a Hydra at level 5 is a separate question. Perhaps simply because they didn't know where else to put it. After all, the prototype for the Dark Elf Witches was the Sorceress from the Heroes of Might and Magic IV expansion – also a top-tier creature, like Hydras, although not as durable.