I'm pretty sure pioneers take materials, not iron. You should always be able to build an improvement in your city (for no material cost) that generates 1/turn. Old Growth Forests can be built in to make  4/turn.

Also, I think you're playing it too much like a typical 4x game. The campaign is more limited, and is designed to give you a general idea of how to do things (although not very well explained unfortunately). Keep Relias on the campaign trail and more things will get unlocked to you. Check out the Kingdom Report (button on the bottom left of the UI that looks like a crown). There is a campaign tab that gives you more info about what to do. (Talk to this person, etc etc).

Oh--one last thing.  I am trying to continue with the campaign, but the big "troll monster" killed virtually all of my troops, and all I can train are peasants.  If I upgrade anything like swords, I can't build them (no metal).  

And I just checked... the resource needed *is* metal.  All I can train right now are caravans and peasants.  My city is level 3 and I can't build *anything* (all of the buttons are grayed out, and when I mouse over them, as well as troops, the metal requirements are red I suppose since I don't have any).