The Hero's Path

These are the words of a true commander. As for the "crushed" effect, it's simply a quirk of the random number generator – it operates according to a standard formula, and no matter how many times you run it, it will always produce the same result. In this case, you just need to do something else that uses randomness. The simplest thing, perhaps, is to wait for the next night – there, each turn, it is randomly determined whether there will be fog today.

As for choosing an army, I would gladly switch to the Dark Elves, but the hero doesn't allow it;

What exactly prevents you from choosing Elves? You can easily create a traditional Dark Elf warrior with Furies/Lizards/Witches.

During the game, I sometimes had the thought that it would be good to turn the entire army into undead and retrain as a Necromancer, but there is no way to do that.

In the graveyards, you can turn everyone into skeletons :) (I considered transforming them into equivalent creatures, like in the Necromancer's Castle, to be unnecessary). I once assumed that the army would actually be lost in battles, and periodically, after difficult campaigns, it would be possible to rejuvenate it with new units, including quite cheap undead. But if you play without losses, then, of course, it's a pity to disband a huge accumulated army and start gathering troops from another Castle again. Although, on the other hand, if you play without losses, then you should have more money than usual. And there is also the "Necromancer for an hour" item – having dark magic in your arsenal, it would be a sin not to try it.