Why do they all hate me?

[Captain Gars]

On another note, I've noticed that once the attack begins my armies lose their moral in battle so much quicker than the enemy, so that even an army that is 50% larger will be defeated by it's weaker enemy. Is this a difficulty level thing? Playing on very hard, I thought it might be, but it seemed to be worse when my money went negative. Do my troops lose moral because I can't pay them?

Yes, your troops get morality penalties from your negative wealth. Also, when you raise your levies, they only start with 40% morale and takes a while to reasch 100% so avoid a fight until this happens. But try to take out their levies with your retinue before the same thing happens for them.