For free updates, I'll be happy with just balance and bug fixes.
That said, I'd welcome some minor diplomacy tweaks with rivals (I find it far too easy to ally with them, but it might just be me). Perhaps make the quests they give you result in a choice between a favor or keeping some kind of unique reward to yourself? For example Ceresa's bones could be a city's essence boosting artifact...
I'd also welcome an ability influence random map generation like in LH where you can pick % of terrain type, landmass type (islands, one continent, two distinct continents, amount of fertile lands, mountains, etc), and have the option to select the number of Rivals regardless of map size.
Also, more victory conditions would be nice, but you need to look if the game mechanics allow to make them interesting. Someone mentioned ally with all rivals, but at the present that would make small and tiny random maps where there are only 1 or 2 rivals a breeze. As it stands, you would have to go out of your way NOT to win a diplomacy victory. Maybe if alliances were significantly harder to achieve, and some rivals would automatically go to war if you allied with a rival they don't like... and besides, Rival-wide alliance should not equal to absolute victory. Rivals+player alliance is an alliance of small pests in the eyes of the Sorceror king anyway.
Perhaps a master quest to forge some artifacts of power? Maybe go beyond that, and incorporate the idea of alliance and forge an artifact of power for each allied rival as well? With each artifact forged a threat to Sorceror king would go up, and you would have to defend your rivals till the last one if forged? It could tie up with crafting system, and force you into a choice of how to use your crafting materials.
For DLC, I would like to see more champions, and maybe a couple units themed to synergize with the new AND existing champions' skill trees. For example, the existing ranger unit really makes archers shine.
Similarly, I really like the hero champions rival races gift you, even though their usefullness varies, their uniquenes is still very cool. It would be nice if the Rival's units got bolstered by presence of the rival hero, though! Like Pariden's archon granting a boon to pariden mage units one can trade for.
For the expansion, I may be in the minority, and it may open a new can of balance worms with spells, but I'd love to have the return of Elemental shards, instead of the single universal shard. Now, there is very little reason to war with Rivals: they never control enough universal shards to concern yourself with, the units they sell you are nice, the hero they grant you is awsome. Why war?
Now, if they had control of a unique resourse that could possibly outweight the benefits of the alliance, then thats another story. If there are only 3 fire shards on the map and all of them are controlled by the rivals, well... Also would be nice if you could capture their hero in your service if you choose to war with them and won. LH had that mechanic with Sovereign surrender, albeit the broken spirit debuff was a touch too severe, imho.
Of course, more sovereign options and ability to play as rivals (and have THEM have more soveregn options) would be extremely welcome!