About Yu-hon’s dumping the heads of prisoners who had surrendered. This is a story that we only know from Xing’s side, as far as I remember from Kouren who was a child at that time, it does not seem like enough to me, so I am waiting for Kouka’s side to be presented to learn what happened. Su-won did say that something about agreeing with his father’s methods under certain circumstances. Yona didn’t ask him about it, but I wonder what he meant?
About him Yu-hon being passed over, because he was cruel to enemies. I don’t think his reputation among foreigners would count so much. The people of his own country admired and respected him. I think this would be more important than the fact he is not popular in the neighbour country. Besides, I doubt that Yu-hon’s and Il’s father cared so much. There were wars during Joo-Nam’s, Il’s and Yu-hon’s father, reign, so he was not a peace lover.
And then there is a question how the flashback that we see at the beginning fits into it. (Su-won’s memory in which Yu-hon is ok with not being the King, telling it is not a big deal and that he wants to protect his younger brother and the people.)
http://www.titaniascans.com/reader/Akatsuki+no+Yona/002:+A+Torn+Bond/#page=12
This memory takes place years after the war in Xing, so it may be that Yu-hon did change for the better. He would have years to do so and why not? Yona changed a lot during months.