I’m not so much talking about how difficult fighting in the woods would actually be, but about what it is like on the actual game map – that being that while the forest terrain is an obstruction, it won’t slow down either parties approach to a degree that they can’t still usually engage on the first turn. The map is basically built around a fast pace.
That’s the thing though, the big time consuming part is left out of the battle. The tracking, choosing position, drawing out, chasing, hit and fade, retreating, and so, that is what takes up a lot of time. Time that is abstracted to the strategic layer of the world map (moving around the enemy, following them, luring them to a location of your choosing, trying to shake them off, etc). We only really see the part just before both sides engage in close-quarter fighting. The battle is like the climax of all the preparation that surrounds it. Kind of like what enemies on the map do isn’t actually retreating, as you usually can still catch them, while the catching of people on the world map (who’ve actually retreated) takes a long time.
Boxers are actually an interesting example, as the reason as to why those fights last so long is that they’re lengthened with pauses, specialisation and not being allowed to use techniques that run the risk of killing their opponent. Fights would be much shorter if they didn’t (and would probably always end up with a boxer dying). Basically, think of what would happen if both boxers suddenly pulled knives and went for the jugular.
If they want, they could have the engagement vary a bit depending on the group. For example, fast hunters, like werewolves, having a larger engagement circle than slow wiedergängers. Coupled with differences in sight range, this could result in a night battle where you didn’t notice that the enemy ahs reinforcement, before the battle actually starts.
Sure, you can beat a group in front of a base. They just won’t get help from their comrades because you’re probably too strong for them to come out. They’ll come out if they think they can take you and reinforce the fight. They’re basically chickening out, so to speak. ;)
Physical and mental are currently represented by fatigue, hitpoints and morale. They’ll get more depth with the injury system and more status effects. Those would probably add the bits that you’re looking for.
Incremental fatigue only serves to handicap low-fatigue units even more and just makes the fatigue stat even more important than it already is. I can’t see how this would be a good change.