For morale, villagers basically need 3 things: food, water and shelter. Put up a native hut and some leaf beds in it, and they'll be happy to sleep there. People report that villagers have trouble finding a free bed if there is more than one house in their area, so it's best for each work area to have only one house. Note that villagers set up as guards don't sleep, and thus don't gain morale from sleeping. In emergency, you can increase their morale by feeding them morale-boosting foods, such as carrots.
If you villagers are humans, they will also have relationship trouble. They have a personality, and like one personality above other and dislike another personality. You can safely ignore what they like, just make sure they are not living and working close to people with a personality they dislike.
For relationship to player characters, as they have said, there are 3 main options: adventuring together, dancing, and love potions. Love potions are a late-game option, it's fine to ignore it. If you get a relationship high enough (to at least 50, it seems), you can also have sex for +10 relationship per session.
Like Black Market. This game is from developers of Black Market, and shares that game's screwed-upness.
Monster Black Market is a lot more sane. And their monsters are much gentler with slaves.