1) First of all, a nation or nations based on
Prydain, or
Welsh Mythology in general, is a great idea. The movie is loosely based on the first 2 books in the 5 book Chronicles, and those in turn are loosely based on (a very sanitized version of) Welsh legends and mythology. So, if you want, there's *lots* of additional material to flesh out the nation with.
2) That said, your heroes should *
never* be on the same side as the wielder of the Black Cauldron.
3) Unless they have some amazing other attributes, you could just take some misfortune scales and avoid having them ever show up on your doorstep. Or just send them off alone to die in the nearest enemy province.
4) Gurghi is using Ailin's sprite.
5) Ideally, the Cauldron-born should be immortal, and should lose hitpoints the further from the Black Cauldron they get (similar to Hamadryads.) This would be "hard to balance" (tm) but would probably be somewhat similar to the vampires drawn to the Vampire Queen, but with leather armor, normal weapons vs. life drain, and no flying. Obviously your "normal" cauldrons should not be able to create these, so you'd have to create a different unit type.
I think you'd be better off doing a nation based on Arawn the Death Lord (Black Cauldron, the Cauldron Born, Gwythaints, Cornelius the Horned King, etc.) and/or one based on the various opposing forces (the Sons of Don, Dalben, the Fair Folk, the Bards, the Free Commots, etc.) The enchantresses could go either way.
Just IMO.