Just flew across the Atlantic to spend a few weeks with family in MN, so my responses will be more delayed than usual. Sorry!
The map’s scale isn’t obvious, even with my having mentioned above that the Empire’s north-south diameter is one third of the distance from pole to equator; so let’s be clear that the Karagond provinces are large, not the equivalent of European countries. Shayard is as big as Greenland or Congo; Erezza, slightly smaller, is more like Mexico. Wiendrj is comparable to Mongolia, Nyryal to Peru.
Go back 600 years, and the continent was littered with smaller countries/tribal territories more like the Europe we know. As you get out and about in future games, it should hopefully become ever clearer that the other regions of Shayard like the Coast and Reach (which used to comprise multiple countries in their own right) are united with the rest of Shayard by language but culturally very different – something I’ve just begun hinting at in this game. The age of imperial consolidation (particularly post-Theurgy) has overlaid the older, smaller countries with these giant provinces.
I mention all this to make clearer the ambition of cutting a shipping canal across Erezza. It’s not Panama or Kra, even at its narrower points – it’s more like a canal from the Bay of Biscay to the Mediterranean through the Pyrenees. This would not stop the Theurges, but it’s not the kind of earthworks they’d do in their spare time.
And as @cascat07 points out, it won’t be their priority because such a canal would primarily boost direct inter-provincial trade – while the whole Karagond mercantile system is set up to extract wealth from the periphery to the center, maintaining Karagond control and dominance (at the cost of massive market inefficiencies, but hey, that’s premodern empire for you).
So yes, the biggest series of existing canals runs from Veldrin to Aekos, with a lesser canal route mostly complete linking the river Aekos and the river Fyrne (in eastern Shayard/western Erezza). Both were created to bring the wealth of Shayard and Erezza (particularly Shayardene grain and Erezziano minerals) to Karagon. The much sparser wealth of the northern coast generally gets funneled up the river that runs past Nyrnakan (capital of Nyryal) and thence overland to Aekos.
@WinterHawk, belatedly, “That all the Seas may rejoice as one Ocean” made me laugh – thanks. 
@Player, yes, there will be more romance options. Not in this game, though.
@DavidMac9, the nobility are unlikely to love you in this game no matter what you do; but you can improve your standing by (a) being noble yourself, (b) raiding the tax collector, (c) showing mercy to nobles when the opportunity arises, and (d) being nationalist. Intellect comes into play in the tax collector raid, and if you make it your high stat, it opens up various other possibilities – give it a try!
Everyone: the discussion of tactics and equipment is helpful, please keep it up. However, what I’m grappling with (as I mentioned earlier) is that thanks to Theurgy this is a very different high medieval style of warfare than the 16th century in our world. No guns; explosions/“artillery” which are created by individuals rather than heavy cannon; airborne recon and attack. So the tactics and kit are going to have to be quite different from any real-world counterpart. In particular, I think the Phalangites will have moved quite a long way from the phalanx formation (which was already showing its limits in Roman times in our world).
@WulfyK, the Erezziano and Shayardenes had some blue-water capacity before being conquered, and the Hegemony has developed that into an oceangoing navy. Given Karagon’s geography, of course, the navy is based in the provinces, not the “homeland” – but as Vladimir Putin could tell you, that only becomes a problem if you’re worried about the empire falling apart. However, both you and idnlun are right that the Wards greatly reduce the Hegemony’s naval capacity; the fact that only a handful of ports can pass weapons or Theurges is a huge limiting factor. And the Karagonds’ isolationism helps them accept this trade-off rather than trying to rule the seas.
I’ve tried to convey in what I’ve written that the Shayard Rim has rainy winters, not snowy ones; and while they’re “mild” by the standards of, say, Nyryal, they’re still chilly enough that people who are living rough and underfed are going to be prone to get very sick. Shayard’s climate isn’t quite comparable to much of the US at the 30th parallel because it’s not properly continental – most of it is close enough to the sea to be wetter and more volatile.
And yes, the Shayardene Codex would be shorter than the full orthodox Codex. Is that really triple-question-mark surprising? 