In one thing you are correct: Morale is everything, playing the Casse (and most barbarian factions for that matter), that's probably why they have Drwdae, Calawre (later Rycalawre :D) and Generals to bolster their morale and Uirodusios and again Generals to lower the opponent's morale...
Yep, they're mobile, are good skirmishers and used correctly they can stand their ground against Romans :P

I can't agree on the VH/VH approach though, at least not when trying to determine the strength/usefulness of a unit. I can "safely" assure you, that the AI does get the attack and defence boni and probably a morale bonus too (that might not be working ;) )... On the other hand I don't know what .exe you're playing but even on VH I have never seen the AI do a manouver that deserved a better label than "not completely retarded".
I for one don't see any change to the better in Battle AI by increasing the difficulty.