Certainly, drafting an army is not a simple thing and its effect on the citizenry has to be reflected accordingly. And, to be fair, I don't know enough about the setting yet to accurately judge things like deployment speeds, conscription rules and so on. With them regenerating gradually it would certainly alleviate the frequent battle issue, I guess I also have one wonder that would certainly change my perspective on things, and that is how troop permanency/positioning is handled. Say you draft an army, move somewhere, then win to a convincing enough extent that you could keep going. Do your guys get consumed on the spot? Sent home immediately? Or are they allowed to keep going towards perhaps an ultimate objective, somehow? A second question pertaining to the token system is how you would treat different unit types, to balance their worth against one another. What I liked about Rhymer's initial concept is that you could essentially draft an army, give them an appropriate "health" value of sorts, and then have them exist for as long as said value is something above 0 (probably significantly above, considering morale and all). The token system feels a little all-in heavy, unless they were allowed to persist on the map, which essentially turns them into health anyway.
Both systems can work, in the end, but I think one offers more versatility than the other.
Edit: You could pretty much combine the two by just allowing the winner to keep any surplus tokens he had (5 tokens vs 8 tokens = winner keeps 3) in play.