It's been a VERY long time since I've played the game so my memories of it are a little fuzzy (still haven't worked out the mood and interest to finish the expansion pack, though). However, as I recall the serfs just occupied a slot in whichever house was closest to their workplace. And if the houses were all occupied they would just sleep round a campfire (I think) and suffer from decreased productivity at their jobs. Generally if you make sure to place your houses properly so that the serfs don't need to walk too long a distance from their workplace to their house then you should be fine. Also, it was generally better to upgrade the houses when you needed more homes for serfs then to build a couple more standard houses. I think you could also kick your serf out of a house to make room for a different serf, but I'm not sure (I might be mistaking that feature for something in Cultures, another strategy series similar to Settlers that I used to play).
As for farming I don't recall much about it except that I hadn't any difficulties getting the grasp of things at the time. Have you actually played the tutorial mission? I recall the tutorials for that game did a pretty good job with explaining the basics of the game and how each production building worked.
Anyway, have you tried looking for Walkthrough/Strategy Guide/FAQ online, or maybe a "Let's play" on YouTube? Those could probably explain things better than me and my fuzzy memory can. Hope it all works out for you in the end (I suspect you'll get the hang of it eventually, Heritage of Kings wasn't even that difficult or complex for a "Settlers" game).
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