The arrows are purely a visual element. Damage dealt happens separate from the animation and doesn't have anything to do with how many arrows you see.  What happens when a company of archers attacks is that each archer rolls from 0-(attack/number of archer)s vs. the enemies defense roll (0 - defense).  If the result is positive, it's the damage dealt. Damage is summed for all archers and that becomes the total damage dealt to the enemy unit.  

In your particular case, did the enemy have a high defense?   Seems like your archers had a low attack and were particularly unlucky in their attack rolls.  If this wasn't the case, please let us know.

Companies (Here I'll use it as a stand-in for all groups of multiple units, be they teams, groups, etc.) have several advantages over an equal number of units of the same type.  For example:

1) They train faster than single units.  A team of 3 archers will train more quickly than 3 single archers.

2) An army is capped at 12 units/companies.  By using companies, you can fit more units and, therefore, more power into those 12 slots.

3) A company (currently, and as far as I know) uses 1 attack roll.  Against a target with high defense, this can be a life-saver.  Say you have 3 archers, each with 6 AT, facing a target with 10 DEF.  With the single archers, your chances of damaging it aren't too great.  With a group, the total AT is now 18--which gives you a much better chance of damaging your target.