Using a Hydra
When surrounded by enemies close by, use the Hydra's attack on any opponent. All of the Hydra's heads will lash out, and kill one of each enemy.

Getting a good army
Start with the barbarian and catch some villains. This is easy on Arcathia. Build a very nasty army including pikemen, nomads, knights, archers and lizardmen. If you get an army with over 400 lizardmen it is possible to kill dragons with three strikes.

Gaining stats from treasure chests
Approach a treasure box then save the game. Touch the treasure box and you will get one of several options:

100 gold or 2 leadership points.
200 gold or 4 leadership points.
300 gold or 6 leadership points.
400 gold or 8 leadership points.
500 gold or 10 leadership points.

A leprechaun willing to trade a spell if you release him.
A tribe of nomads who give you +1 to spell capacity.
Some minerals that will get a pay raise from queen.

If you do not get the desired treasure, load your game and try again. Note: Do not try for the spell capacity, as it seems to be very rare.