When recruited heroes are indeed different from each other. But they all can get the same weapons, they all can be imbued with magic... after a while they are all the same. My suggestion is to limit heroes in what they can do.

That is a big mistake in a gameplay which in fact repeatedly has been described as one that tries to "do too much".

Heroes IMO should be specialized in the kind of weapon/armor they can carry. Maybe some of them are unable to use swords, but get a bonus when using a hammer and not all of them should have a magic predisposition (some of them cannot be imbued). Also I have suggested that not all cities should be able to produce all kinds of weapons so that giving the right equipment to the right champion would become a quest in itself accomplished by traveling to the right city.

As things are now everything can be done everywhere and that means that all games end up being and looking the same!

so i guess you guys dont mod the leveling system to scale with armies. my knights rely on high strength to kill their enemies. my mages get alot more inteligence too.

At the risk of reanimating threads, I didn't see anywhere where hero differentiation was being discussed.  If it is, please post a link, and I'll edit my comments over to it.

The decision when a hero is hired should be what the hero will do, either sit in your capital or other city (in which case he/she/it should have faction wide bonuses, not city bonuses), or be an adventurer.  I know it was discussed elsewhere for city bound heros getting some exp/season for sitting home, and my suggestion to that is that all the administrator heroes gain exp whenever a building or unit is built in any city, or if any city is successfully defended against attack.  That's the role of those heroes, making your civilization stronger; reward them for that.

I'd like to talk mostly about the adventuring heroes, and how to differentiate them.

It looks like there's only one type now; arcane warrior.  A person with armor and an axe that can cast spells.  There aught to be 4 types: Gimli (melee/aggro), Gandalf(defensive spellcaster), Saruman (offensive spellcaster), Strider (ranger/leader).

Melee/aggro should be able to wear plate, and should have traits that make them more likely to be targetted by the AI.  Some damage output.

Defensive casters should be able to wear robes only (and there should be robes in the magic/warfare crossover tree that can be built with crystal that gives advantages to this kind of hero), and should have faster access to buffs/heals

Offensive casters should be able to wear robes only, and have access to DD and AOE spells faster.

Rangers/Leaders should have some ranged attack, and have traits/levelups that allow the whole army to gain bonuses.

My personal opinion is that we should be leveling up more, not less, to get more specialized traits, but not have any (or very little) intrinsic level up bonuses like HP.  If I want a Saruman, he's gonna be a paper cannon, and I need to defend him on the battlefield.  Don't give him 100 hp at level 15.

But I'd like to see level 30 heroes with lots of specialization.  There doesn't seem to be that much right now.