Thanks! What a bunch of excellent lore related questions. :3
I won't go too much into detail, but I can comment on some aspects of the bigger picture.
"The trench warfare" is not necessary a spitting image of our WW1. It mainly emphasizes how the war has gotten completely stuck (thou trenches are likely involved). This is why the area the game takes place in, the Frontier, is largely neglected by de facto governing power, and running the area has fallen mostly into the hands of local nobles and the church. There's no doubt lethal weapons are used in the war, both rune-based and conventional, and yes, mages and rune weapons fill many conventional military roles. Chemistry and physics have evolved to a point, but much of it has likely evolved hand-in-hand with magic. While flamethrowers exist, we do not know what they shoot out for example. Gas warfare is mentioned, but how they produce chemicals for it is unclear.
The combat in the Frontier is medieval largely due to the area being, well, a frontier and under quarantine. Due to the evident lack of guns in the frontier it's correct to assume that they do not exist in the form that is familiar to us, or they are such a new invention that most people in the Frontier do not even know they exist.
The guards seen in the game are personal hires for whoever is running the area (usually Catherine). Everyone is having very bad time generally, so the quick and easy solution is to just hire a lot of guards until the root issues can be solved. The society is more or less circling the drain, though I admit it could be better indicated in the game.
About the wargs' abilities: they do not replace body parts. While they can plug wounds and can even fortify broken bones to some extend, at some point the host is just done for (warg queens MAY be an exception to this).
If a person with no arms puts on a warg with arms in place, the warg would either morph to match its host on that part, or fill the arms with its goo to make it appear it has arms, but they would not be functional, or they would be very weak. But a complete limb replacement - probably not possible. If the host takes a grievous injury like a dismemberment, the warg may separate from its host willingly and find a new healthier host.
When it comes to eyes and ears it may be different. The wargs *technically* form working eyes and ears on their host, so if the host's brain can interpret sight and hearing signals, they should be able to see or hear at least somewhat even when they normally could not. I mean wargs carry over fully functioning genitals too, so why not eyes?
Hope this clear things. Yea I haven't thought the war aspect much. It's mainly there to justify why the Frontier is so neglected and there's really nobody properly in charge. The empire would likely solve the warg issue immediately if it was in full strength and stable, so war it is.