Thirded.  Encouraging two heroes in each army would be a nice balance.

Some suggestions from me.

Maybe create a spell, maybe call it Mentor. It can have the following effects:

1) One time experience share, 50% exp of the mentor is given for free to the mentee, the mentor doesn't lost any exp. Maybe the spell cost is high, depends on the Mentor exp or level.

Or

2) 2 Choosen heroes will be a mentor and a mentee, the spell cost mana maintenance, but these mentor and mentee won't have to divide their experience if they fight together at the same army. The higher their combined level, the higher the mana maintenance cost.

Agree whole-heartedly.

Gaining a new champion should be an exciting event, and should give you/your faction a power spike. This is currently not the case, because after two or sometimes three champions, the rest are just sitting in cities for -unrest. Totally underwhelming. Why should you be punished for stacking champions/sovereigns? Or at least, why punished so severely? On higher difficulties, the game moves quickly and if you stack champs yours will never be able to match levels with your opponents. And it's not easy to train two or three full armies worth of units to go with your champions. That really slows down your tech/infrastructure rate. 

Extra champions right now is almost a burden. At the very least, it's very unsatisfying. "Oh sweet, got a new skeleton dude! Now which city needs -unrest? See you never skeletonman!" Ugh.

I find this to be more of an issue with low level champions at the start of each game. When I get the first and second champions, I usually have to park them in a city for a while but I would love to take them around with my Sovereign.

Suggestion: Champions lower than a certain level (5? 10?) should be "Squires" which do not further split the experience when grouped with another Champion or with your Sovereign.

Can a quest be created that removes the xp penalty when two heroes are together?

I don't mind the xp penalty for the most part, but it would be cool if I could complete a repeatable quest to "prove" the two heroes are compatible enough to fight together. Then again, I do like quests, so the more the merrier.