The strongest hero.

After the final cutscene of the Horde Masters. Ultimately - yes, Eliya, but Railag set the precedent and showed that it is entirely possible (by the way, it seems Railag is the second unified chief of the dark elves after Tuidhana, which speaks to his strength)

Still, Eliya.
The demon worshippers were not eradicated forever; Menelag and Fenrig remained alive, for example.
The fact that he is a chief doesn't speak to his strength. Tuidhana was chief because she suggested a handful of elves flee to the dungeons and switch to Malassa's side. Eliya was chief, but one cannot claim that she is strong.

Ashan won't know this or won't give it any importance, because in Dark Messiah there is no sense of fear regarding the coming apocalypse; only the necromancers are worried about it.

When Ashan finds out that their "wise and mighty" leaders are not so wise and mighty, there will be general disappointment, or perhaps even horror that they cannot be protected from it.

He always was, and remains so. And Railag's obsession with Isabel is, of course, his main flaw, although how is it a flaw—if not for it, Railag would hardly have become one of the most famous and strongest heroes in Ashan.

No, you can't compare a single Tiera to the once great Order, which had many followers and mighty allies. The Dragon Knights died out, the heirs degenerated. In short, with Railag's death, the Order will finally fade away and be tossed into the wastebasket of Ashan's history.

It's quite possible that the player will be given the choice, but the canonical ending will be the "good" one, according to which the further plot will develop (like in Star Wars).

Not necessarily; I think there will be two equal endings, as in Dark Messiah.
And how is it in Star Wars?

Their duel could take place after Sareth's choice (if he destroys the walls of Shio). Railag wins, and Asha wakes up (she didn't spend all that time recovering for nothing) and drives the demons back.
Here is a possible happy-end variant)

If the duel happens after Sareth's choice, Railag has little chance of winning. But we know nothing about how events will unfold. In my opinion, the killing of Railag would look very dramatic. It would be much more interesting than Sareth's defeat.
If Asha wakes up, then Urgash will wake up too, and vice versa. In this case, against the backdrop of the battle of the dragons, both Railag and Sareth, and perhaps even Kha-Beleth himself, will perish as pawns in a grand game.

In the first add-on, Railag's ability is even better. He increases the initiative of his troops by 1% and decreases the enemy's initiative by 1%, so in terms of his ability, he truly has no competition.

I am apparently poorly informed. In that case, yes, in terms of initiative, Railag has no competition.

And I'm not surprised. Findana can indeed be leveled up very effectively if you try. I had defense around 50, and I didn't even use all the available possibilities.

Well, I am very surprised. That might be possible with artifacts. Otherwise, unlikely, except in exceptional cases where defense rolls more often.
Let's analyze. Suppose that by the 5th mission of the 6th Campaign, Faendran is level 33 and has higher education. That is, to the 5 starting parameters, another 33 and another 16 will be added. Total: 5+49 parameters. There are definitely 2 defense (out of 5 initial). 30-40% of the received parameter units are allocated to defense. Taking everything to the maximum: defense becomes 2+0.4*49~=22. In Faendran's game, i.e., 7 missions (not counting the last one), there are about a dozen Marletto towers and 7 arenas. If you take only defense in the arenas, it turns out that 24 additional are added to the 22 standard parameters. Total 46. Well, it roughly works out, but it's at the expense of robbing other parameters, specifically attack.