in that order and just continue like so in order?
Yes.

But, for the most part most factions can't recruit much in german territory, unlike many other territories. Should we stick to units that the majority of foreign factions can recruit?
I think the best way to check out what regionals can be recruited in province is to select faction that is most far away from this province.

There are quite a few germans units that can be used by everyone like:
Gaizofulkom Frijot
Dugunithiz

Is it even possible to give a faction units it can't recruit or will this cause problems?
Its possible. But you should only put units that:
1. Have all factions in ownership section
2. Are mercenary units

If unit in not a mercenary and doesnt have faction in ownership this means it doesnt have texture for this faction and if you try to play with this unit on battlefield as this faction the game will crash.

Or should units be put in for each region and then left to the discretion of the player whether or not to put in a type 4 or another type for proper simulation?
Lets keep unit spawning only for gov4 to not burden EBBS with additional scripts.