Just like in Heroes of Might and Magic, your hero is more of a tactitian than he is a fighter. However the hero can interact through spells and rage abilities. His Attack, Defense increases your monsters stats, and his intelligence increases your spell power.
In heroes they did try to make the hero participate, the result was enormous imbalance. I prefer to keep the hero as a tactitian over a fighter fighting in the field.
No, your army is the only thing that engages in battle. I'm playing Armored Princess (haven't played the original) and the only connection your hero has to the battles are the spells that are cast.
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