The *4 swords against light ranged units* is the strength of the attack bonus and defense buff when striking light range enemy units. If you hover over the 4 swords, you'll see the percentage of each of those. This only applies to light range units; they don't have that extra strength against other enemy units. The 3 stars that appears in the pop-up if you hover over the troops in the troop selection window for battles refers to their level. There are 'promotions' that you activate in the research tree that upgrades their level. Three star is the highest level. You can find this information on the enemy units by clicking the blue information thingy on that same troop selection window. Then you'll see (for example) that the enemy heavy range unit has a huge attack bonus against light melee. So, you're not going to send swords out against him just to get slaughtered.
Auto fight may not be as much of a disadvantage as you think it is. There's all kinds of things you can learn to figure it out yourself, but I recommend starting with this thread for an easy to follow formula:
https://us.forum.elvenar.com/index.php?threads/combat-101.4968/
By using this formula and catering rounds you lose, you can do sort of a mix of fighting/catering. That's helpful primarily because training troops only costs supplies. It also saves your goods for all the other things you need them to do. By balancing the levels of your barracks, armories, and a couple of Ancient Wonders you can train troops 24/7. That will be the single biggest boost to your ability to keep up with the troops spent on tournament encounters. Remember, you're not going to be building out your military to take most of the hit; you're just building it out to take some of the pressure off your goods production. You'll need a couple armories (or craft Orc Nests) in the Orcs chapter when a new resource: little green orc heads is introduced that are made in Orc level+ armories.
You'll be amazed at how many fights you will win with the information in the above linked thread, even in the higher provinces/rounds of the tourney.***
***Written by an old lady who had never played combat games, didn't build any of the military buildings for the first several chapters unless I had to for a quest; didn't even train units! The benefits of being able to use both resources (troops and goods) were just to much for me to decide to keep doing that. I started with the Combat 101 thread and learned more from there. I had a lot of catching up to do, but I enjoy the combat aspect of the game now. It's just too bad manual fighting is so time consuming! It does save you in troop loses, but if you consistently complete the same rounds in the same province numbers each week, you'll begin to produce what's necessary to keep up with what you're using.