Why's this world at war?

Based off of available information(Your Host's memories and the information gleaned from your temporary prisoner) it is most likely a war of independence.

The power you are a part of, known officially as the Eternal Kingdom of the Phoenix, was originally the ruling nation of the continent. Starting in the Year 0 and continuing until the Year 956, the Kingdom was embroiled in a slow, steady campaign to unify the continent under one rule, primarily their own. For some, this unification was ultimately a boon, such as the Unified Tribes, who, until they were brought together, were largely secular and prone to infighting among themselves. Others, on the other hand, viewed the unification with hostility, primarily what would become the Confederate States and the Theocracy.

Since the unification, the ruling family, the supposed descendants of the Immortal Phoenix, have grown more and more decadent and uninterested in the actual governing of the combined nations, demanding larger taxes and putting laws into place that serve little but themselves, and to some degree the Kingdom. This has lead to friction with two of the three powers, the Confederates and the Theocracy, both believing that they had the right to true self-governance, on top of questioning the Phoenix Throne of the legitimacy of their right to rule due to their negligence.

One can assume that one or both of the mentioned nations have decided to openly revolt against their would be rulers, with the state of the Kingdom itself in question, along with the stance of the Tribes.

tl;dr: Ancient and long running tensions between multiple nations is finally exploding into armed conflict.

>>92546
TL;DR We are the evil empire, driving around in our Death Star to go blow up the skulls of some uppity rebels who want less-autocratic government, and maybe autonomy too. Gotcha.

There's more to it than that, concerning you as the Watcher specifically, but its story related.

Overall though you are the evil empire that finally managed to tick off everyone enough to start up revolutions

We don't know anything about how hard it is (or isn't) to regain spent magic, so we can make an informed decision about whether the magic assault rifle's worth taking. Is that a deliberate omission?

Yes. Magical Regeneration is dependent on two factors. Both are currently unknown to you, since your own knowledge of how your "body" works is limited to what your Host is aware of, which is limited. Once a Magos is located, more information regarding you own body, and its limits, will become available.

I can say that none of the weapons presented are necessarily bad choices. More a choice of preference than limitation. I will say that weapons that rely on magic are never meant to limit you in their usage unless used excessively.