You can promote captains although it is part of the game mechainics rather than a button you can push.

If you send a small stack out to take on the "rebels" that so often infest you land - and have a good victory (usually requires a heroic victory) then you MAY get a "man of the hour" event that asks you if you want to promote the captain.

I often find however that the number of generals that you get is more closly related to the number of provinces that you have rather than heroic victories and so on.

As for having generals in provinces it is not that serious a problem as leaving generals in towns will often give them bad "traits" that will lessen their effictiveness to govern. That and a generals bodyguard unit is probably one (if not THE) best unit in the game - especially early on.

It is a delicate balance to leave enough generals behind to gain enough money to finace your campaigns whislt still keeping your best fighting force out there.

Good luck!!!

ED