When everyone has lordships, though, there ceases to be any incentive to invade neighbors. Plus the more titles people have, the more conservative they become. Add to this that tax tolerance decreases, fixed expenses increase, and the increased lordly burdens occupy people, the lower the noble:region ratio, the less a realm will be both willing and able to wage war on another realm. Which then stiffles interaction, and leads to internal decay.
This. The best realms have a significant body of knights who want lordships or other riches/titles/glory. Their pushing to make something of themselves is what usually drives internal conflict in the realm or what drives them to go to war (because having an enemy to fight keeps the knights from getting rowdy).
