The thing that defines strategic problems is the tension between long term goals and short term goals. Without this tension, there would be no real difference between tactical problems and strategic problems.
In past Total War games, one of the most basic strategic problems was what to do with a captured city/province. In the short term, the best thing to do with the captured province would be to totally trash the place. You get a lot of money from doing that and inconvenient people tend to die off in the process. But in the long run, this would really set back the productive potential of whatever you took (unless their was no other way of keeping it from rebelling).
In the abstract, this is an easy decision to make. But when you are in a fight for your life, that extra shot of money could mean difference between having a long term future and not having one. It made for interesting choices if you could contrive to make the game difficult enough for yourself.
I am using the past tense because that trade off does not seem to be in effect in Medieval Total War II. I have not played the game enough to be sure, but it seems as if there is never a good reason not to sack a city in the new game. The damage you do is minimal and the rewards are great.
This is why it may have made sense for Spain to try to take Wales with a crap army. They had not hope of keeping it. But the payoff would have more then paid for the army and fleet that carried them there. It is possible they were just trolling along the coast looking for easy pickings. And Wales would have fit the bill perfectly if it where not for the heavy cavalry going to Wales to retrain. But I don’t think the Spanish boats could see that they were coming.
And the method by which I came into possession of such a large army of heavy cavalry so early in the game is another thing the threw my strategic calculations off.