Correct it is a measure of "burn out"! Aggro will be dynamic, it just won't fluctuate greatly at any one time...unless a unit absorbs tons of casualties while being highly fatigued and losing a fair amount of morale all at the same time.
Since it has so many factors associated with it, aggro will not fluctuate as wildly as say...fatigue. I intend to have small scenarios that may last less than a day, and then I intend to have scenarios that could last for several weeks. Being aware of unit aggro is important regardless of scenario size, but managing unit aggro becomes a real consideration for longer scenarios. So there could be real benefit by resting a unit a week (or more depending on the situation). Note that low aggro for units on the defense isn't a huge deal, it will affect units attempting to attack to a much higher degree.
Don't jump to conclusions about low aggro regarding bad morale and fatigue.
A unit with low aggro doesn't necessarily mean that it currently has low morale or is fatigued. Recovering fatigue and morale, getting replacements, etc can facilitate faster aggro recovery, but the point is that there are gradual lasting effects that can only be recovered with time. Bottom line, a unit that is continually in combat will start to slowly lose its aggro.
These examples should help illustrate the concept:
A) a unit is in combat for a week and loses 20% casualties. Let's say the unit gets enough replacements to get back to 100% manning by the end of the week. Even though the unit is back to full strength, it's aggro is not back to 100% due to the grind of being in combat. Given a few days rest, the unit will be at full aggro.
B) a unit suffers 40% casualties after being in combat for a few weeks while receiving no replacements. Despite receiving no replacements this unit can recover its full aggro given a few weeks of total rest.
To your points:
1. Agreed, but in a game where a single player has to manage lots of different units it can get cumbersome for players. Showing a % can show players where a unit is at and give some context on what to do with the unit. I will add that a unit's aggro is shown as a %, but its impact on unit performance is going to be somewhat vague (intentionally).
2. There is nothing new to worry about regarding setting up tactical battles since it only adjusts the casualty threshold. This is all part of the pre-battle calcs spit out by ToO and given to players.
3. As stated earlier, low aggro does not mean useless. It simply means that it may withdraw sooner from an engagement. Commanding units with low aggro on the defensive may not be noticeable, but on the attack it will be more noticeable.
I don't think this will have great game balance implications...at least no more impact than any other variable. Remember that it doesn't impact a unit's combat power at all, it primarily reflects the level of enthusiasm a unit has to attack the enemy. Does this help explain?