As for the speed issue, maybe to could give them a Power (kind of like the Elven Gifts), added to the Spell Book, giving them a boost in armor/attack for all the Dwarves except for the Heroes of course. So that way, they're still slow, but can really take/give out damage. Simple, yet highly effective for their cause.
Powers like that are too OP. Only Darkness and Freezing Rain should be unit remain since those can be countered with Cloudbreak and Sunflare.