No, the world progress will continue and won’t be downgraded at a mass. Tho you can influence certain regions by destroying all the camps, that will slow that non playable faction.
As for the stats. I can’t say there is a right way to lvl them so obviously there is no wrong way either. There are “limitless” possibilities of equip perks and stats and all can be valid if you are able to make a good tactic around them. A group of weaker backgrounds can fight thru most of the things that you encounter. You will eventually lose some anyway if you don’t load up every time some1 dies ofc. There is a natural flow of personnel. Eventually all your people can be the best backgrounds that you can ever wish for.
Dismissing a whole band is a suicide.