Anti-daemon elves sound like more of a white seer or harlequin thing.
I actually think warlocks might be in a decent place right now.
They already have swords that wound everything on a 2+, do multiple points of damage, and have some AP these days. Plus they can toss around a bunch of psychic powers so that they're hitting on 2+ or rocking a 3++ or functionally have AP-2 (Jinx) or simply add a few mortal wounds to their damage output for the turn. Oh, and you can up their cost a bit and toss in some singing spears.
They're not quite as good at the actual melee part as banshees or scorpions, but I'm not sure I want them to be either. We already have banshees, scorpions, and wraith blades competing for similar jobs yet maintaining their own niches (infiltrating, high durability, and whichever angles you lean into with the banshees). Making warlocks compete more directly with those three seems bound to render at least one option irrelevant.
That said, if you *did* want to make melee-focused warlocks, I'd probably. do it by changing up how their psychic powers work. Limit them to only buff powers (Protect, Enhance, and Witch Strike?). Let them auto pass psychic tests (count as rolling a 7 or something), but only let them cast 1 power each turn. The idea being that they're casting safe familiar powers. Basically, trade flexibility and direct damage dealing powers for more reliable access to buffs.
But again, I think the normal unit is in a pretty decent place right now. It's just maybe a bit too dependent on getting its buff powers off to stay alive.
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