The ideal situation would be essentially two game modes, which are actually different, unlike in RTW; arcade and sim. Of course arcade being for those who, as Nagatsuka mentioned, shy away from "hard" games and prefer an RTW type experience. The sim mode would be for those of us who like more realistic games and such.

Failing that, I think at least the difficulty settings should do more than give the AI better moral and more attack and defense points. Sheesh. I imagine actual better AI could be incorporated into the different difficulty settings instead of arbitrary bonuses.