This is like patting your head with one hand, rubbing your stomach with the other, hopping up and down on one foot while spinning, kicking with the other foot, saying the alphabet backwards, and winking one (or both) of your eyes according to an outside source.
Except harder.
So when getting items for your character, here are some things to consider:
Items that say "Max Dmg +x" only add 1/2 the damage they say it'll add. however, "+x Dmg", and "+x Magic Dmg" items will add the full amount.
Put a "go back to town" item on heroes that tend to get dead first (the hero who is farthest away from the majority) This is so that high level heroes can fight the dragon while you can train your weaker heroes as much as possible, or so your weaker heroes can still run through the dungeon while you give the dragon a minor asskicking.
Put some form of life regeneration on new heroes and midrange heroes, they get eaten by mobs.
In my opinion, best items for your stronger heroes are the highest +dmg items and high crit% items, and +gold on your weaker guys.
I just have one comment:
My army was made of 1 defence swordman and 4 archers, and when I got into battle i usually put it as defense so my swordman would tank. However, when melee units started to come towards him, he'd walk BEHIND my archers. Fix that?
"Rest Time" - its time when there is no enemies - just rush enemies to reduce "rest time".