Nice to see you back Drisos.

what is squalor? just the size of the population? ehh
Squalor is the enemy of all things public-order. Essentially you need a large garrison to keep it down. Exterminate the population when you conquer it (and later on, if you're not too picky) in order to keep it down.

can I do something useful with all that money?
Yeah, pretty much what Horus said. Tech up and keep recruiting. Crush the Sassanids with sheer numbers.

Also, in BI it takes 2 units of peasants to neutralize the same amount of squalor that 1 unit of any other troop can do. Use regular, low-tech troops instead.

any tips on defeating a large enemy as the sassanids?
Stay on the defensive until you finish recruiting all of those high-tech troops. Then, slowly but surely, go on the offensive. Patience.

any suggestions for who to attack and what to conquer?
Take out those weak factions that you mentioned. That way you'll be able to concentrate on the Sassanids.

how do I keep loyalty, especially in regions far away?


Also, as Horus said, change your capital to a central location.

will my family tree grow big enough to get governors in all settlements?
Eventually. But every settlement doesn't need a governor (you can turn auto-manage off via Options in case you have that on) as they'll get corrupt. Better to use them as commanders.

is there a reason why I shouldn't just use only-cav armies? with 20 saxon sea raiders I beat any army, even with lots of spears in a mattar of seconds and kill 99% of the enemies..
Eventually, you're going to have to start besieging cities. Worst comes to worse, just put a couple of infantry units there as bait/cannon fodder.

what can I do when I get to conquering settlements where the populations is christian?


As soon as you conquer the settlement, destroy every single Christian building and put a pagan shrine up. If you survive the first round of riots, then you won't have a problem.