If it's separate count, I can see 200-300 being reasonable. So what if a single unit by a battle-worn noble with a gazillion honour is able to take a stand in small mountain regions? There aren't many who are capable of doing this and able to sustain the unit maintenance (have you tried paying/repairing a unit of >100 men?).
Exactly. I have to admit that the idea of a Hero making a valiant last stand with his three hundred hard-bitten veterans alongside him gives me all kinds of RP chills, but a large part of that is because it should be damn difficult.
What effect do you think that fortifications would have on things? A fortified castle or town can be completely surrounded, and should probably open the battlefield much wider.
I would suggest that for the first stage of implementation, they function like rurals. In the future, I could see more elaborate ideas, but I am (with great difficulty) trying to keep myself focused.
To that end: I think we have a solid idea. Limiting battle-widths to X number of soldiers per side, with Mountains having the lowest number of X and Rurals having effectively infinite X, and hills/forests/badlands in between. Time to write up a feature request! Now, all of you go discuss the other two ideas and come up with some of your own!