I stayed in Morek as one of those silent drones doing nothing. Wasn't even interested in that. Heard a lot of stories about how hard it was to expand. Must have been fun. By the time I returned to the game, Astrum and Corsanctum were created.
Don't think Western Dwilight armies are suffering from morale. There are still several problems they have to deal with though. Equipment damage, Embark cost and location, capital location (for getting reinforcements) and provisions. But I am sure these things will be sorted out along the way if dev thinks those are causing problems.
The one thing I hope is that it is going to be possible to at least get some toeholds back on the western subcontinent; superheavily fortified cities or townslands, something like that. I enjoyed playing in Niselur and reclaiming it from the frontier, wouldn't mind being a frontier lord again if I can swing it.
