I've been playing Crusader Kings 2 again lately, and the split between feudal vassals who give you troops and city vassals who give you money is interesting. It has me thinking about my Estates ideas from back when.
Maybe a good option for Simple Domains would be to classify vassal and tributary domains a little differently.
A vassal domain is one whose ruler has entered into a feudal contract with another domain. The vassal domain's primary obligation is troops - rather than paying taxes in cash, it pays them (all or mostly) by maintaining and supplying troops and putting them at the disposal of its sovereign. Taking a quick look over Simple Borderlands domains, it looks like if you roll your taxes into garrison you end up with about twice the standing troops you otherwise would, so I don't think this is wildly unreasonable - it's not like we're taking domains with 5kgp/mo in garrison and asking them to assemble 50kgp/mo standing armies for their lords to call up.
Maybe this is a good spot to use per-culture mercenary mixes; when you call your vassals up, they don't bring super-specialist armies, just the troops of their peoples' way of war.
Henchman domains are typically vassals, because they're loyal enough to trust with troops. When you call up vassal troops, roll loyalty of the vassal; if you roll badly they make excuses and send only a fraction of their obligated troops.
Tributary domains, on the other hand, pay all of their obligations to their sovereign in cash. You don't need to trust them with a double-size standing army, but if you want to turn their taxes into mercenaries, it will take you time.
Perhaps the arrangement between sub-domains and their sovereign has some influence on morale, depending on the nature of the underlying domain. A hill tribe that you've subjugated may be happy to provide warriors, but they're cash-poor. A trading city has plenty of cash but no access to good troops; asking them to maintain an army for you is a greater burden, and will reduce their domain morale.
Vassal domains providing troops instead of taxes seems like it might be a good way to accelerate the domain game, where the ability to accumulate an army is the limiting factor of an up-and-coming fighter.