Abokasee:
Hoggy already made a wraith unit.
When Demons conquer a city their only choices should be exterminate or enslave. If humans conquer a demon city their only choice should be extermination. This will lead to a difficulty in expansion because suddenly you cant produce elite units on the front lines and you cant retrain the elite units you already have but the other faction can. This will cause large tactical problems as you progress further into enemy territory because powerful units will be worn down and cant be replaced and supply lines will become long and cumbersome.
It would also be perfect if all the buildings in the captured town must be destroyed as well or at least become unusable. This of course will also only happen in human vs demon and not human vs human.
Demons should also be able to recruit human mercenaries as normal. There are always evil men in the world.