The armies on the surface are fixed. This is partly to protect against the AI, so it doesn't destroy everything while waiting for the player to reach the surface. It's also a good source of experience for leveling up both heroes.
Well, at least someone is struggling with Giovanni... usually, I hear that the brave vampire angel-savior, Corenak, is the one causing problems. Although, during testing, it was the opposite.
Whether to give Lucra or not... everyone decides for themselves. But in general, the idea of trading her in the quest came about because it was impossible to script a return to the tavern after death. That is, she dies permanently if she loses a battle in any way.
Good luck to you! By the way, the side quest with the mines can help solve the money problem.