No, you're not doing it wrong. The advanced tactics and formations are only available through some of the mods.
Once you do mod it up though, the whole thing changes. You can set pre-battle orders, and then give specific instructions to different unit groups. It's pretty detailed.
I'm not really an expert on it, though.
I've never really understood pre-battle orders. My orders always change based on what the terrain looks like, and it's always different enough that I immediately move my dudes anyway, so like, yeah. It just seems like pointless faffing around.
Formation orders and tactics and stuff are pretty handy. I'm not an expert in them or M&B in any sense, but they can help give you an advantage - just kinda simple stuff like 'stand closer'ing really hard if the enemy has cavalry, and make them hold somewhere with trees around, preferably at the crest of a hill, to gum up their horse charges. Spread out if you're advancing on an archer-heavy army position. If the enemy is scary and advancing on you with skirmishers or arrows (say, Sea Raider types, when you're still fresh and weak), hide just behind the top of a hill and charge when they start cresting it (spreading out is probably a bad idea here, since they're individually pretty tough, and you want your dudes close together to help out. I usually stand closer really hard, though I'm not sure if that's optimal, since then they might be getting surrounded more).
Oh, and remembering to make your infantry charge when the enemy line smashes into them. Elsewise they mostly just stand there eating whatever javelins the enemy has, and then letting the enemy maneuver around them.
Possibly acceptable if they're shield-heavy distractions, but you probably want them hitting back, which they seem to not really do when hold positioning, as the enemy will sorta hit them and back off out of range and stuff.
A lot of the time I've ended up acting as a distraction by just horsing in circles around charging bandits. If I've got enough archers, they can take loads of potshots, and it spares my infantry casualties. That probably falls under the purview of 'abusing AI' more than battlefield tactics, though.