So: Our fighters won the air combat though suffering some damage in the process, but were unable to then shoot down X-Com's troop carriers (possibly due to the damage?) - not a good result given that they cost twice as much as X-Com's craft, which would probably win at two-to-one odds. Our own light UFOs are about equal to, if not slightly better than, their Skyrangers one to one, which is fine but nit great. Our aerial advantage is in the balance. On the ground we were heavily outnumbered in terrain which negated our short-range advantage and were duly trounced. I'm afraid that I've failed to resist the urge to say I told you so and that we'd likely have got better results splitting up. But enough of that.
I'd guess that It's entirely possible that the psionic activity is X-Com's, in which case their playing-field-levelling new aircraft weapon was only a revision and we could be in serious trouble. They'll probably replace missiles in their fighter loadout with more of the things and thus negate our ECM for free. This could, then, be a valuable opportunity to locate their base, or something else entirely. In either case the signal will probably continue for a while, so I'm not sure it'll be worth putting off major ground improvements for. Though I suppose a DNA token would be very useful if we decide to make the Brute, not that there's a guarantee we'll get one next turn. We may also get some triangulation on the signal by sending Sectoid missions to different corners of the globe, come to think of it, if they're sensitive enough.
On the ground I doubt just up-armouring the sectoids will suffice, especially as it will almost certainly increase their cost anyway. I also have a couple of ideas for potentially useful revisions and will put them up tomorrow, as well as a delayed response on goals; It's getting late and this post is long enough already.