The current unit selection goes by the tab system. You may notice that in that mess of portraits, on the left, numbers start appearing, the more units you have selected. A new page for whenever the current page of portraits fills. Starcraft 2 does the same, although it generally deals with fewer units. Grouping units the way you suggest might work better given the amount of units that can add up.
Micromanagement is not that complicated when you can tab though the different unit types in the selected group. It is a limited kind of micromanagement, true, since telling you warlock group to cast fire storm may make that one warlock that's in the back and needs eons to try to shift through your army to get close enough to cast.
The issue with selecting individual units is present by the fact that they are pretty small.
But really, I have trouble seeing what could even be changed to "fix" this? It could also be a factor that intentionally adds to game play difficulty.
