Hi,
My favorite island right now is Truax island. It has a great mix of landscapes and small towns, and in general has a really great overall mood to it. You should check it out - its available on www.ofp.info if I remember correctly.
As far as spawning troops are concerned, do you really need more than 63 groups per side? Remember, these are groups not units. This means 63*12 = 756 units per side. Should be enough I would think.
Of course, dynamically creating units does have its advantages... but in most cases its just not needed. In general, if you do decide you need to create these units dynamically, you should use createUnit to create the units, then use the removeAllWeapons command to remove their weapons, and then add the weapons you need to the custom units. You don't need to use dynamic waypoints (I believe you can set them from a Game Logic) but if you want to use them then use the move command to move units to a position.
Hope some of this info helps!
Brother Blades