They affect your morale, heals and damage.
Can get expensive, and you still have to buy all the expansions.
I can't find anyone, uh! That understanding was years ago.
You will meet a few big-name bad guys—Skorgrim, old leader of the Dourhands, Ivar the Gaunt-Lord, and some big-name good guys—Dwalin, king of the dwarves, and Elladan and Elrohir, elf sons of Rivendell.