Whelp. I picked the wrong turn to pull in some mages (particularly the Antimagic mage) to do a bit more research. On the plus side, I'll be deader soon and can finally be free of this crawling abomination of a game in good conscience.
Ulm, you're talking like it's some dramatic surprise that a late-game powerhouse can stomp an early-game powerhouse. Since Arco finally is making their move (don't expect them to stop with Ermor, obviously, because why would they; have fun getting stomped by the monstrosity that's festered unchecked while you pointedly ignored it), I'll point out what I've been avoiding pointing out for half the game. Chaff not withstanding, Ermor's actual economy is not a freespawn economy; it's a gem economy, and gem economies never scale up as well as gold economies. Ulm just captured 5 provinces? Great, now they can afford to hire 2-3 more flexible and powerful smiths per turn. Ermor just captured 5 provinces? If they're incredibly lucky, after 4-8 turns of site searching they'll be able to summon 1 more worthless-outside-a-lab Revenant per turn. Probably not, but maybe. Oh, and did they want more proper troops that can kill the other side's proper troops instead of chaff that dies by the hundreds? That will be competing for gems with the mage summoning, TYVM. Your capital income is providing you with the wherewithal to hire several mages of various levels per turn by itself. Mine gives me enough to hire one tier 1.5 mage and cast a single lictor summoning spell. That alone pretty much tells the entire tale of why it's a ridiculous idea that Ermor's growth is unconstrained even if they're contained. Past the early portions of the game, research > chaff, for reasons you've been demonstrating for quite a while now (and Arco could have been if it wasn't entirely to their advantage to let everyone focus on "real threats") - if I had proper research I could counter what you're doing, but I don't because I'm Ermor.