I quite enjoy playing Ulm, too. My most successful games of Doms I and Doms II vs. the AI are using Ulm. Though, it fits my play style, and I have the most experience with it. However it's pretty clear that magic isn't their strong suit, and magic can get megapowerful in the late game. Convince your opponent to use slow research speed setting for the game, and you'll be in a much better position.
Some specific ideas:
* I only recruited two Master Smiths in my Doms I game, because they could make plenty of equipment at the rate with which I hired new commanders to use it (and the rate at which I got new earth gems for them to use). I did empower one of them and got him some Earth Boots, though. I also found a great library so I had sages for the other magic disciplines. Having a mage pretender with plenty of magic can go a long way to make up for lack of mages, for some purposes anyway. I chose a dragon, myself.
* On the other hand, it sounds like Earth Power plus blade winds can turn a bunch of Iron Smiths into a blade hurricane, so that might be worthwhile. It might be a way to deal with some of those squids and anti-mages, though it sounds expensive to me. I'd probably use mercenaries, summons, and cannon-fodder light infantry like tribals against them, sparing my Ulmish troops, since their strengths wouldn't help much against them.
* My Doms II Ulm game is with Iron Faith, and they seem about as good as regular Ulm. You mainly want to use the Black Templars to take advantage of it, I think. Start the pretender with magic that gives some nice bless bonuses, and then have blessed Templars as an evil flanking/mop up force in cooperation with your Ulmish infantry and some cannon fodder, and you have a very nice early-game army. Templars end up being much cheaper than Black Knights because they are holy units so they cost half to maintain - same deal for the Black Priests, and the Black Priests give you random magic skills too, so you can get some diversity unavailable in the main Ulm theme.
* Guardians are very butch. Lord Guardian commanders have the best basic skills of the Ulmish infantry commanders.
* Try to use more mercenaries and cannon fodder against things that can overcome your armor, such as Jotuns, squids, poison gas, miasma, etc.
* Get Dwarven hammers and use them for practically all forging except when you really need more items immediately.
* Forge of the Ancients can get you masses of cheap and powerful items. If you cast it, be sure to invest in items which increase magic power when held, before someone dispells it.
PvK