Yeah, immortal commanders will never flee if they're in friendly dominion. They'll fight to the death. Of course, if they die you lose any items they're equipped with, so you want to make sure they win
Encumberance doesn't affect fleeing. Wraiths won't get fatigue from fighting but they can still get it from casting spells. However, sould vortex will remove their fatigue quit quickly.
The wraith sword is ok, and some was of regaining hp is indeed vital to SCs, but it has its weaknesses. In particular, you only get 5 points of life drain damage per attack and it's two handed. Bogus /also/ has high prot and very good regeneration.
With soul vortex, you already have a source of lifedrain so I think a good shield will improve your survivability more. The fear/awe combo in particular is very nice and can dramatically cut down on attacks from low-morale chaff units. It works well with soul vortex, because you can drain enemies even if they don't attack you.
Bogus is quite vulnerable to magical attacks, by the way. A bunch of mages with 'charm' scripted is an especially nice one.