Ouch, those auras sound like a little bit more bookkeeping than I'm comfortable with at this stage... the fact is, units are going to be going in and out of that range throughout combat. I don't like the idea of having to keep track of that. Maybe once we've run a few scirmishes and I've gotten used to keeping track of a couple hundred units in heated combat? I'd rather keep things a little simpler at first. I mean... heck... I'm already going to have to worry about area of effect spells, and those tend to be instantaneous in duration!
As for that 16CR hydra... after a few scirmishes, you'll get more CR... when your total CR is only 1024, you'll be able to have a CR16 creature under the 1/4 rule. 1,156 for CR17, 1,296 for CR18, etc.
Under the 1/8 rule, you'd need 2,048 CR before you could have your hydra.
Any more votes from the players? I'm certainly not going to make a straight CR cap, since eventually I -do- want to see how epic levels work out in warfare, but having single unit armies also doesn't appeal to me either... as I said, waves of flesh marching across the fields just has an awesome feel to it. Supported by gryphons or dragons above, that's a cinematic picture right there.
Oh, and by the way, you have factored equipment into your CRs... at least for Perseus you have. When you make a lvl6 paladin have CR6 (squared for point purposes)... PC equipment for lvl6 is factored right in automatically. Without equipment, your paladin is CR4.8, using 23.04 points.