Shinuyama indeed has a rough time in the early game. Its starting army is pathetic, has no recruitable sacreds, and you noted has no units with shields, and its only really good regular units are somewhat expensive.
But if Shinuyama manages to survive into the mid game, they become damn near juggernauts. Their magic is unparalleled. They can cast site searching spells in 5 magic paths (FEWND). With simple boosters (no unique items or rings of Wizardry, etc.) on their Bakemono sorcerers, they can have mages with F5, W4, E4, or D5 (if you get lucky with your 10% chance, you can even do one better - and also Staffs of Elemental Mastery are also easily within reach).
By late game, they can be spewing out great deals of deadly magic, in combat and ritually. On the battlefield, Fire Arrows is just the tip of the iceberg.
So basically, to pay for all that later game goodness, you have to run the gauntlet in the early game. That's just part of the deal.
So in SP, recruiting indie infantry (w/ shields) ASAP is a good idea. You can do it in MP too, but that wont save you from a nasty rush. Your big tools there will be diplomacy and trade (the wide variety of quality items you can forge should make a nice carrot). That and the realization that sometimes your just screwed
