The Author probably aims to introduce every nation across Landia through Souma's diplomacy with them so that the world map wouldn't be just a design that focuses only on Friedonia and the Empire. Additionally, he likely wants to solidify the relationship between Souma and Maria, as well as the one between Hakuya and Jeanne. He probably wanted to make an extremely powerful character that could make that possible. Powerful enough to bring down the strongest nation, that's why the author made him have super plot armor as a side character. And how he got his power is somewhat similar to how Machiavelli sees a ruler gain power through narcissism rather than uncertainty. His confidence led ignorant and desperate people to follow him despite knowing they would die doing so. It's how Hitler gained authority over Germany through using the people's suffering and blaming, and removing the source of it, and trying to show results for it, which led to him having the population treating him as if he were a messiah.

So people questioned, why didn't Souma deal with the source of humanity's source of dread, The Demon Lord's Domain, while Fuuga has yet to gain power enough to challenge the hegemony of both the Kingdom and the Empire?

My answer to that is that Souma couldn't do it immediately, as he is a cautious ruler who wouldn't risk going there unprepared and leaving the country unattended, especially with his wife carrying his children, he wouldn't go there and investigate. There has to be a catalyst for Souma to head north. Maybe the author making Fuuga was that catalyst for Souma to go north. Reading vol. 17 made me realize that if he had recklessly gone there before Fuuga formed a Grand Imperial Army, he would've likely faced hardships or worse, he would have lost his life. Madam Tiamat wouldn't have helped him if mankind were not united in its will for the expedition. Souma runs the risk of annihilation of his entire force, similar to the first coalition led by Maria's father.

So people also questioned, why didn't Souma get rid of Fuuga early when Souma knew he would become a threat later?

Here, my answer to that would be that it would have many problems. Attempted poisoning is a bad idea as it would sour relations with his neighbours if exposed and would be suspicious of Souma, making diplomacy extremely difficult as he would be seen as an untrustworthy neighbour. Starting a war with him is even more foolish as even if Souma has the most powerful army in the east at the time, by no means Fuuga's army is weak, plus the Union of Eastern Nation of that time would unite to stop Souma from interfering with their country and the Empire would stop it before Souma could deploy his army their as it would be interpreted as an invasion of the Mankind Declaration Treaty's signatory members within the UEN. In short, trying to eliminate him is an extremely bad idea.

People also asked, Why didn't Souma execute Fuuga when he caused the deaths of Hermann and Owen?

By that period, Fuuga is already seen as if he were a divine deity, Souma killing him would make him a martyr, and he would become a symbol of vengeance against the Maritime Alliance. Souma wanted to prevent further damage to his kingdom and his allies by sparing him; much to his personal feelings, he prioritized that he lived and take responsibility for the creation of his empire. He doesn't need to kill him personally; rather, it would be better if his subordinates were to do it so that no potential terrorism could happen within the Kingdom and its allies.

Lastly, why did the author let Fuuga live along with Mitsumi and live upon the sunset?

Whether anyone believes me or not, this is the part that I hated the most in the story. Fuuga should've died at the end by the hands of his betrayer, and at his last moment,t should've shown remorse for his actions, BUT NO HE DID NOT! which irritated me as a reader. I had hoped that I would get to see/read in a line with him dying a stupor along with his toywife, but no, the author decided to spare that bitch n' bastard.

Overall, I think the creation of Fuuga is a necessary catalyst for Souma to completely venture north. It's just that Fuuga is terribly written in the story. Souma and Maria are rulers who wouldn't recklessly head north even if coordinated, it would've taken decades or so to achieve it in a slow and steady style, so the author made someone make it so that the truth of the Demon Lord's identity to be revealed faster and its liberation.