Does anyone have a tutorial to using Sengoku units in the custom mod without directly copying the files to the mod folder? I'd like to keep the size of my mod to the most minimal.

You need to tell your mod to look in the relevant folder. You do this on the Scenario Properties screen (accessed from the Scenario menu), and in the box labelled Scenario Search Folders.

Say you've got a pile of custom graphics and stuff that you're keeping in a folder called Mymod. In the box, you type Mymod;..\conquests\Sengoku (note all the punctuation).

If you want to use units, tech graphics etc from other conquests, you can just add them to end of this list like this - ;..\conquests\Age of Discovery or whichever it might be. When your custom PediaIcons file tells the game to use a certain graphic, the game will look for it first in the first folder you specify here, next in the second, and so on.