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The shard I~m currently on I own maybe a quarter of the shard and I`m comfortably supporting a hero with some very high upkeep units - a hydra costs 150 Gold and 40 crystals a turn - and one hero with a medium army consisting of four crossbowmen and 3 pegasi. I could probably field another mid size army or bump the "lesser" hero to his maximum and still have non trivial positive upkeep. Your options for increased gold income get a lot better later on.
I don`t think it`s intended to be QUITE this slow but it`s not a fast game at all. Fastest I~ve ever done a shard was ~1 hour and that spawned me really lucky. Elves, a known Mage Tower and the rival close.
Yes, defense is mostly done with Guards unless your territory is very small or you have a dedicated defense hero.
A guard is a preset unit consisting of predetermined units at predetermined levels. You cannot control them in any way other than hiring and dismissing them. Some guard types also have other effects on the province they are in such as increased income if certain resources are present, modifying morale, modifying population growth or decreasing overall income. Their advantage is that they come combat ready and comparatively cheaply both in inital cost and upkeep. The Guardsmen guard for example costs only 350 gold to place and 7 upkeep but consist of several fairly high level Guardsmen, Pikemen and Crossbowmen.
A Garrison unit is a regular unit in all ways that is stationed in a defensive structure in a province. You must pay for their upkeep same as if they were with a hero but there are some buildings and guards that reduce the upkeep costs for garrisoned units in the province they are built or stationed.. Units in a garrison can also not be bribed, unlike most gaurds. Assuming there is a space of equal or lower rank than the creatures in a heroes army or garrison they can be freely exchanged while the hero is in that province.