RTF is a global modification that replaces all towns in the game.

I just think that the faction would look better without the glows. And then we could put hounds on the 3rd level and crusaders on the 4th level
(again, like in the good old third game).

Well, I don't know, I actually like them a lot :)
Besides, we're playing as the Unicorn Empire, not the Hound faction. So, instead of hounds, there will be Unicorns.
P.S. I don't really like the third game, so it's not a "good" game for me.