To load it manually for each game when you want it (Option 1), rename Ruff's CustomAssets and put his entire mod inside your Mods folder. BTW, you start the game *after* you load the mod.
The CustomAssets folder that is already in your Warlords folder is created by the game, and it only contains empty folders. If you rename, move or delete it, the game will just recreate it. That is where you would put the *contents* of Ruff's folder if you want the mod to load automatically for every game. I think EF left off CustomAssets from the folder path he gave for option 2.