I don't quite grasp the rules for heirs/squires; do they use the same tokens from deceased characters, or are they separate?

They use the same token.

The general thing is that it is very hard to actually have less than four nobles available - if one dies then his "heir" replaces him. There are some cards - events and agendas - that can stop a noble from having an heir which would mean if he dies then he is out of the game for good but they are rare.

Furelli

Not that hard to have less than 4 nobles, in the second game I played one player had 2 nobles with "broken line" or something like it, and it forced him to protected them like crazy (a bad thing if it happens to your noble with most troops, because it may slow you a little).

Is there a possibility of another expansion?

I have ideas of how to deal with heirs/end of line rules that would add a new dimension to the game, as well as balancing the loss for a player who loses a noble permanently.