It is strange, but this morning I was thinking in something similar, not so limited with regard to battles.
The idea was that the factions are only able to recruit militia, with very low battle skills, and low costs (only for garrison), and all the conquest should be done with mercenaries, very expensive to recruit and to mantain.
That means you must manage your empire from an economical point of view and only when you try to enlarge the empire or defend it from an invasion, you will hire mercenaries. And you should "finish the contract with them" just when the conquest or the defense were finished.
This would require a larger variety of mercenaries, but it could also serve to change the character of your army depending on the part of the map you are conquering or defending.

Do you think this would be possible?
My concern is about the factions controlled by the AI. Would they hire mercenaries or we would face huge armies of militia?

Cheers.