Darn I miss that game. I wish they would do an updated version of it.
I believe they realeased a special Siege Pack expansion for II which let you play on some 'historically accurate' castles and added quite a few additional features that aren't present in the original.
It also improved the AI a whole lot, especially for the siege battles. If my memory serves me correct it also added a map editor, more maps, a custom battle mode, more castle designs, more diplomatic options and random events.

The more I think about it, the more I realise that Shogun does take a lot from Lords of the Realm II. Medieval even more so with merc recruitment and the sieges. The major quantum leep is in terms of the real-time battles on 3D terrain.
LOTR2 actually had some features that wouldn't be implemented into the TW cycle until R:TW. The ability to construct siege engines on-sight at a siege was new in Rome but present in LOTR2, as is the ability to raise your opponents terrain to reduce his income. In fact, the campaign map troop movement is pretty much the same, they both allow you to move your armies where you please except up mountains, giving movement bonsuses when you are on the road and if you attack the opponents settlement/castle then a siege begins.

All lovers of the Total War series, pay homage to the games that started it all... LORDS OF THE REALM and LORDS OF THE REALM II