Slitherine

when you pick a DAG army and issue a challenge one of the options is terrain Density what dose this mean? or am i being stupid?

If you mean 'Terrain Type', from 'Very Open' to 'Very Crowded', then it refers to how clustered a map will be terrain. 'Very Open' might give you a largely flat map with few terrain features, while 'Very Crowded' would be more likely to have hills, woods, streams and so on. Select whatever you think will suit your army best.

Yes, Medium infantry operate best in a cluttered environment whereas Heavy Cavalry and HI do not. Very important to pick the right terrain density if you are given a choice.