Ok, you people are making me feel REALLY AWFUL about my skills in this game with all of your posts
After reading all this, I installed M2TW and started a game as England, no mods. I'm like 30 turns in and I lose Caen (I do EVERY time, to the point I feel it's unavoidable), and I picked up western UK and York.
That's it. That's all I can manage. There's not enough money to do anything! I usually start by building dirt roads if I have the option, and the Pope wants to excommunicate me if I attack Scotland. Can the pros here offer any advice? Everything's on Medium, and I usually end up automatically resolving battles.
As for you money problems, almost always sack cities as it gives you cash to continue the fight. Also set the tax rates in your cities as high as they will go with out rebelling, and in auto-managed settlements set to financial build policy. You can grow your cities later, early in the game money is the most valuable thing! Also get rid of un-need castles, in your case Caernervon probably doesn't need to be a castle because Nottingham is a much better castle right next door. Also take advantage of the free unit upkeep of militia units in cities, it can save a bundle on defense, and lets your more powerful units to go on the offensive.
A third way to make money is through diplomacy. Usually the AI will be willing to pay for your map information or an alliance and trade rights are a must to establish, and this kind of has a snowball effect early in the game. With the first nation or two you contact you won't be able to get the AI to pay much for map information or an alliance, but as you get more maps, or as you establish more alliances which causes your diplomatic power to grow, you'll be able to extract much more money for these offers. As a plus, the more alliances you have the less likely other nations will attack you, its almost like you're being paid for other nations not to attack!
Finally don't worry too much about breaking an alliance or getting excommunicated, its not the end of the world if you do. It is unpleasant, but if the threat of excommunication is stopping you from expanding anywhere, you might just have to be excommunicated for a bit.
Hope this helps
Don't let the AI do your battle, in most cases you can do much better (exceptions are suicide battles like attacking across a bridge, which is impossible but the AI doesn't factor the bridge in).