Defending multiple areas in this game, while also maintaining a healthy income.. isn't necessarily easy from what I've seen. So keeping multiple militaries on file, depending on your location, at least as a novice to the game doesn't appear easy.
But yeah, the Militia doesn't seem to upgrade armor - I noticed some weapons increase, probably the hammers you mentioned.
Also, very preliminary but.. Doesn't the city defenses kick in generally once per turn - for one combat? It appeared to me that I could effectively 'reset' this by allowing an auto-combat at that site, and any subsequent combat afterwards would again, show them as on the roster for combat.