It's strange that people are having difficulties; I'm playing on normal, and I haven't spent a single day specifically hoarding an army. Moreover, an army is practically unnecessary—I play with summoned elementals (Water and Light). If there are problems, I cast a level 3 Aura of Retribution on them. The main thing for the primary troops is to stay in the corner until victory. Even the deadly arenas can be completed.

Currently, Eshwick has been taken, and I've received the quest to find the source! I still haven't taken the neutral Castle, but I captured the lighthouse immediately. As I understand it, I won't receive a quest for its liberation; my question is, have I lost much in terms of bonuses?:)

Added after 2 minutes

In the end, I found a winning combination.
Place Light elementals near the shooters; the demons don't wipe them out on the first turn.

Generally, I noticed that water elements are more durable than light ones. And there are more of them thanks to the Staff of Tide