Out of curiosity, what is this significant health nerf you refer to? I checked my install of FE and my install of LH, and it looks like unit health was unchanged except that the largest group size went from 7 to 6, while champion base health went from 15 to 20. Warriors and Defenders lost 1 health per level a piece, the Adventurer's Boon trait went from a flat 8 health to a flat 10 health, and the Endurance traits went from 1 health per level to 10 health for Endurance I and 15 health for Endurance II (and Endurance III and IV disappeared), but on the whole most units don't appear to have suffered greatly in terms of health (heck, the whole Amarian race gained 1 health per level from the transition, even though they lost their health for Earth Shards deal, which I'd count as a net gain to their health). So basically, from what I can tell the only things that lost out in terms of health were Warriors and Defenders, and the overall damage dealt by things within the base game went down, too.

If by "everything" you mean Defender and Warrior champions, then yes, they did lose a bit of health in the transition from FE to LH. However, I'd say that, on the whole, health remained more or less constant, unless leveling is significantly slower in LH than in FE, and I don't think it is (just to be clear, I think it's a little slower, but not significantly slower, except in the case where you were able to get Potential I-III on a champion in a reasonable time frame in FE).

I also tend to agree with Azunai_ - it isn't that the Defender is particularly weak, it's that you're comparing a class which is strong in the late game (mages) to a class which is strong in the early game (defenders). A Mage can't hold a candle to a Defender before about level 10, and might have trouble dealing with the Defender even into relatively high levels depending on relative builds, and in the early game when you're still sitting on low mana income with relatively weak troops (say, 3 or 4 figures per unit with up to tier 1 weapons and armor) Defenders are more useful for the army - unlike the trained units and Mages, they can go occupy a strong enemy while the supporting army clears out weaker stuff. The change to the Endurance trait also tends to front-load its utility - in FE you'd have to be at least level 10 before Endurance I was as good or better than it is now, or at least level 13 for Endurance I and II to be better than now, which means that the current iteration of the Defender is getting a big chunk of health right when it's most useful - low levels.

Are Mages more powerful at high levels than Defenders are? Yep. Are high-level Mages more useful than high-level Defenders? Probably. On the other hand, Defenders can help your army out when it really needs the army support, and low-level Defenders or Warriors can wipe the floor with low-level Mages any day, and outside of a few specific spells a high-level Mage isn't really any better against a dragon than a high-level Defender is, assuming that the Defender is decently armored and has a nice weapon from loot (which it should, since if it's high-level you ought to have found at least a half-way decent weapon already). For that matter, depending on exactly what spells the Mage has and what traits were picked out, the Mage might be worse than the Defender - it doesn't matter how much Fire damage you can do when the target is immune to fire damage, and it's well within the realm of possibility that I might have a Mage whose only really useful spells are Fire damage spells; it might not be the best or most versatile Mage I could have, but it's certainly a possible Mage I could have - all it takes is a Mage with only the Fire spellbook, and a bit of time developing the damage line, or a Henchman Mage with only the Fire Adept line developed for damage. Moreover, if I ever become mana-starved for whatever reason (maybe I decided to blow a couple thousand mana on Curgen's Volcano and then got into a war with an AI, and don't have enough to meet my immediate mana needs, or maybe I've just been using mana too freely over the course of the game), my Mages just lost a whole lot of their utility. Defenders don't have that problem.

A better comparison for whether or not Defenders should be buffed is in relation to their standing versus Warriors, since Warriors are the other class that is more of an early-game than a late-game choice, and I'd say that those two classes are roughly on par with one another. Not every unit in the game needs to be an equally useful choice at every stage of the game, and Defenders and Warriors are much better choices for the early game than Mages and Commanders are, while Mages and Commanders are better choices for the late game than Defenders and Warriors. Defenders and Warriors can give you a strong start, or help you out on a difficult start, more often than Mages or Commanders can. It's then up to you to take that strong start and turn it into a strong finish, and even if you retire all your Warriors and Defenders as soon as you have a few high-level Mages or Commanders to lead your armies and the mana income to fuel Mage spellcasting, they've still done you a great service in securing your initial territory. Besides that, there's still the occasional situation where a Defender can outperform a Mage - monsters which are immune or highly resistant to your primary spells and monsters with Overpower (which really hurts troop durability relative to champion durability) being a couple of examples of such situations.

key to using defenders is knowing when to attack and when to defend. when in doubt - always go for defend, i.e. pass turn or use guard on other adjacent frontline units. most of their toughness comes from the two defense while defending traits - combine those two with a shield and you have a guy with 40 or more defense 20 seasons into the game (for reference - that's about the same as the def bonus from a full suit of plate armor + tower shield). that's quite a big deal. most attacks that would severely hurt your average early game ~0-10 def units will be redoced to 0-2 points of damage when they hit a defender. one of the most dangerous situations especially in the early game are swarm scenarios where your unit is attacked by 3-4 adjacent enemies, each of them getting the stacking swarming bonus. a unit with low defense has almost no chance of survival, even if the 4 swarming units are mere mites or wildlings. a defender reduces that damage to a manageable number. if you also have a healer, he can basically tank them forever. if you don't have a healer, you should at least have some other units that can kill some/all of the attackers before they get their next turn.

without a tank, you'd likely lose at least one unit before killing the enemies. with a tank, you lose nothing but a few HPs that will regenerate. you only need a way to heal the tank back up after the battle (the level 1 life spell regeneration is great for this - heals the unit back to full health between seasons). losing units in the early game is expensive - you have to replace them in order to continue your campaign, so your cities build units instead of whatever other project they would have built without the casualties. so in a sense, protecting and thus preserving your units in the early game can have a big impact on establishing a strong economy - all those markets, workshops, wonders, pioneers(and thus, extra cities/outposts) will be done a few turns sooner (in other words, the snowball effect starts sooner).

Most likely the problems you're describing arise from the need for a general rebalance overhaul of the skill trees. Let's face it: They probably aren't too well balanced as is. 'Potential' is just the tip of the iceberg. Plenty of stuff about the skills themselves but also how heroes can level (the current amounts of XP gained from stationing heroes in towns with buildings like the Adventurer's Guild is positively ridiculous) need changing.

Much of what you're suggesting is finding second-rate solutions to the problems instead of getting it done properly first time around. No, Mages shouldn't get 'rescue', it makes absolutely zero sense to put that clearly Defender skill on a Mage. Main issue with Mages is really that the AI doesn't target them specifically - they're the softest target and the biggest threat yet go mostly ignored which obviously makes them too good.

Likewise, the 'general' traits tab not seeing much use doesn't justify how weak Potential is but rather suggests a rebalance is required. It makes sense that the specialized traits tab is where you'll be spending most of your points but if the general traits go ignored to the point they might as well not be there at all the balance is off.

Can you clarify what you mean by this? Do levels after level 20 not give the same bonuses as those prior?

Technically each level gives the exact same bonuses as any other level. However, the relative difference between levels 10 and 11 is much greater than that between levels 20 and 21 (just looking at the health due to unit level alone, going from level 10 to level 11 is a 10% increase in 'power', while going from level 20 to level 21 is only a 5% increase; this same argument applies to anything with a linear damage per level bonus, and if you think about it, having more than ~95 accuracy is more or less pointless except when fighting Wraiths or dodge-specialized units, as all standard units have a base dodge of zero, and hit chances are capped somewhere around 95%, and a similar argument can be applied to spell mastery as it is rare to find something which has a sufficient amount of spell resistance due to levels to make spell mastery much of an issue on even a level 10 or 12 mage, assuming you've taken Prodigy traits [and if you cast anything other than blessings and summons, you should have taken at least one Prodigy trait by that point, in my opinion]). Moreover, if you haven't already picked up all or almost all the useful traits to how you're playing your particular champion by the mid-teen levels, I have no idea how you've built the unit. Thus, additional traits beyond the mid-teen levels aren't particularly useful as an increase to the actual power of your unit because it's simply not improving an aspect of your champion which matters for how you're using the champion.

Beyond any of that, the amount of experience required for each subsequent level increases roughly with the square of the current level, and the amount of experience earned per battle is to some degree inversely proportional to the level of the units involved in that battle.

A quadratic curve fit gives:

Exp_for_Next_Level = 3.874 + current_level*(1.459*current_level + 6.526)

As a result, since the Potential trait only really breaks even in terms of real trait count beyond level 20 (at which point the champion with Potential is already level 21), you're looking at having to earn more than 620 experience per level (20^2 = 400, multiply by 1.5 and divide by 1.15), which is a sufficient amount of experience on its own to take a level 1 champion all the way up to level 9 (with a decent start on getting to level 10), or to advance two level 12 champions up to level 13, or three level 10 champions to level 11, or a fair number of other combinations, all to obtain an insignificant increase in the strength of a level 20+ champion.

Also, if you look at the actual numbers, taking Potential doesn't actually put you 15% of a level ahead of where you should be. What it actually does is puts you about Regular_Level/20 levels ahead of where you'd normally be. So if you'd normally be level 5, if you took Potential you'll actually be approximately level 5.25; another way of looking at this is that a champion who does not take Potential will be at (Potential_Level)*20/21. Do you really think a 5% per level lead on the leveling curve is really that much of a bonus? The champion without Potential is at 95% of your level anyways, and he didn't waste a trait on a skill that doesn't pay off until the experience curve becomes more cliff-like than curve-like. Something like Potential is most valuable on champions whose power is mostly from their later levels (examples being Mages or Commanders with Battle Cry), but there isn't any class in the game whose levels beyond the mid-teens or so are valuable enough to make taking Potential particularly worthwhile, and there isn't anything with a significant difference over the space of only a few levels if you're already over level 20. Moreover, the levels required to make X/20 particularly likely to have an impact are for values of X where your level is sufficiently high that just 1 more level isn't going to matter in most circumstances - there is virtually no difference in power between a champion of level 15 and a champion of level 16 except if one of them has an extra trait that provides some direct bonus to power, yet a champion with Potential has one less 'real' trait than a champion of equal level, so a level 16 champion with Potential is for all intents and purposes equal to a level 15 champion yet took longer to get to that point than the level 15 champion without Potential took to get to level 15.