On the subject of magic and balance, why does everything have to be in perfect balance? If magic is stronger then normal, then that should be okay.
In my opinion, single player games, especially sandbox, should not have to be perfectly balanced, as long as the player can have fun.
And as for using magic, having the player grow fatigued would be a good way to balance spellcasting out. Want to raise a volcano in the middle of the battlefield? Sure, but don't expect to be able to stand on your feet after that, let alone fighting or casting another spell. This is the system Dominions 3 used and I really loved it

Perhaps even ripping the earth in two, swallowing all soldiers unfortunate enough to be standing in the center! Massive post-battle resurrection in order to continue your neverending conquests. Those are the kind of spells which would make magic really interesting imo.
Of course, these kind of spells should be really hard to learn and control. Perhaps ancient tombs have to be raided for certain spells, or from a book stolen from a historical figure.
This also brings up a question, how detailed will town development be? Lets say you could protect a town or a couple of towns for 2000 years and compare them to a town that's seen combat every few months, would you see a difference? The wartown for example having great walls and cheap fortifications everywhere while the towns that have developed in a peaceful environment are filled with marketplaces and stuff?
I was picturing an insanely powerful mage raising mountains and lakes around his country to protect it from hostilities