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To automate site searching, click on a commander casting the spell, press shift+m, choose a site searching spell, pick a site, and the next month the commander will choose a new site to search.

R'lyeh is an underwater nation, so it's normal that it has a lot of troops underwater (especially in the Early Age and Late Age: Early Age R'lyeh AI keeps building water only units [because that's all EA R'lyeh has]; Late age automatically generates troops in its dominion).
Invading water provinces without water units will require you to either have a unit capable of taking units underwater (like the Sea Troll King) or a magic item that lets you do so (Breathing Pills).

There are spells that empower mages during combat. Mostly conjuration. Phoenix Power, Summon Storm Power, and Summon Earth Power come to mind. Also, the crystal shield boosts magic paths in combat.

You cannot dismiss troops (though there is a mod that lets you do that, I think), and afflictions are usually permanent unless you have a healer unit (Arcoscephale, Gath, Hinnom, and Late Age Pythium have recruitable healers), the Gift of Health enchantment cast, the Chalice, or a unit with Immortality and recuperation.