Armor and damage

So lately playing I was musing about armour and damage values. Main problem here is that there are diminishing returns from each additional point. At armour 5 you get 40% damage mitigation at 15 you get what 59%? This obviously means that first couple of points are most important. I understand reason that high level units or heroes would get basically 100% armour value but this isn't best way to do this.
My solution would be remove armour points and present armour as straight %. Research then would give flat 10/20/30% increase. Other thing is that units have way to much of it, basic pikeman have 40% at at start, I would say that it should have max 15 to 20%. Units could get HP boost if necessary.
Damage have a problem where all units get flat bonus. This is to advantageous to low level troops, here I think good idea would be doing it like starcraft. Each upgrade has different effect on various units, so basic ones get +1/2 per upgrade, advanced +2/3 and elite +3/4. So for example knight swordsman would get 10 base +4 for weaponsmith 2 while paladin would get +8 for same research.
Resistance could be done in same way. For example Pikeman would have 10% resist, quasit would have 20% chance to apply poison. So 20%-10%=10% chance to poison.

I've been trying to think of a way to fix the armour system as well. The current system was indeed implemented to try to cope with mutable armour/resistance values but therein lies the problem. It's really hard to determine the % resists of units in 0.8.9 and it's impossible to tell how the value changes when it's increased or decreased. Then there's the differing increases between units. Generally, it has become too complex and nonsensical for its own good.

I really like your idea. Straight percentages are much better. I'd also remove armour/resistance increases from Dexterity, skills and unit level ups as well. That will require a rebalance in the stats, but I'm sure it's nothing we can't handle. Some spells like Stone Skin could even be changed to give HP instead to signify an increase in the unit's toughness. Weaponsmith research could give a % damage bonus as well and unit level ups in general could become % based so balance is maintained no matter the level or type of unit. Special resistances and vulnerabilities could become a different mechanic which makes good use of criticals, since it's really hard to keep track of individual armour/resistance stats and because some races don't have access to certain damage types etc. It's like playing rock paper scissors but one of the races doesn't have the rock. That's why the strategy may be shifted from damage types to unit types, but we still want damage types to have some relevance too (just not so much that the game strategy becomes focussed around it).

Other thing I really want to change is halberdier and knight units. Halberdier has a problem being almost carbon copy of pike, it could be modified to have more HP cost 3 army points to pikeman 2 and get combat bonus vs infantry.
Something like this:
1)Pikeman 100 HP/ 20% Armour/ 10% Resistance/ 2army points/ double combat vs. cavalry
3)Halberdier 150HP 30% Armour/ 10% Resistance/ 15 dmg/ double combat vs infantry
This way both units would be useful for whole game.
About knights I toyed with idea of making Knight->Cavalier->Paladin upgradable as undead units, with additional unit for stables:
1)Knight 180HP/30% Armour/ 10% Resistance/ 4 Army points, half damage from melee attacks
2)Cavalier 190HP/ 40% Armour/ 10% Resistance/ 4 Army points, half damage from melee attacks
3)Paladin 200HP/ 50% Armour/ 10% Resistance/ 4 Army points, half damage from melee attacks, slashing damage type
4)Mounted Sergeant 150HP/ 20% Armour/ 30% Resistance/ 15dmg slashing/ 3 Army points, half damage from ranged attacks, uses imperial model.
Knight line is good in melee combat, average against archers and really vulnerable to mages, while new sergeant unit fares poorly in close combat but can ride down archers and mages.
To counter act lack of elemental damage Dancing sword could get electrical damage type : 80HP/ 20% Armour/ 20% resistance and 2 Army points.
I really should get to writing down my proposed unit changes somewhere. But basics are simple 200 Army limit, about 20 to 30% more HP and less armour and resist. Builders cost 1AP, basic units 2AP etc.

You wouldn't necessarily have to change the HP values, really.

I would also suggest giving halberdiers a split damage type like 8slashing/7piercing, but with slightly better armor penetration than other infantry units and otherwise allow Pikemen to be hit less often, due to their longer, more easily defensively maneuverable weapon.