A further point on Jorasco and Ghallandra: Historically (Earth history, that is), the majority of casualties in warfare come from disease. In the American Civil War, for example, of the more than 600,000 fatalities, two-thirds were from disease. Aside from infections from wounds (which Jorasco, with its training and magic would drastically cut down on), the big disease killers were things like cholera and dysentery, which Ghallandra would be able to effectively quash, by enforcing proper sanitation procedures alone. Add in purification of food and water?
So, the choice the Five Nations would have is, essentially, hire the Halfling Houses, or watch their armies die from disease.