Slitherine

Just wondering - what exactly do the medals that units collect do in game terms? The role of heroes is crystal clear, but I didn´t see anything in the manual about the effects of medals. So, what do they do? Open up hero slots?

Correct.
They are there for flavor, however with out a medal you can not get a Hero.

It tells you your unit is valuable so don't loose it if you want the possibility of gaining a Hero.