To answer your fist question, I believe only certain provinces which contain the Iron resource are able to fully build up the weaponsmith buildings.Originally Posted by Almohdistani
As to your second, once you hold a certain percentage of the map, the game tries to make it more challenging by dropping the happiness levels in your settlements - it's not a bug, it's an actual feature. It usually happens when you own around 60 % (or was it 80%) of the map. Irritating, but bound to happen sooner or later. It's basically why a lot of people prefer GA mode over conquest mode...
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