If anyone is still trying to solve this issue, this worked for me:
Open notepad, and copy and paste the following text:
AllHealthBars = yes
AmbientVolume = 50.000000
AudioLOD = High
Brightness = 50
GameSpyIPAddress = 192.168.2.101
HasSeenLogoMovies = yes
IdealStaticGameLOD = VeryLow
MovieVolume = 70.000000
MusicVolume = 70.000000
Resolution = 1600 900
SFXVolume = 70.000000
ScrollFactor = 50
SendDelay = no
StaticGameLOD = UltraHigh
TimesInGame = 3
UseEAX3 = no
VoiceVolume = 70.000000
Save this notepad file as "options.ini" making sure that .ini is the file type.
Save this in the folder "My Battle for Middle-earth(tm) II Files" within "C:\Users...\AppData\Roaming". You may need to create the folder yourself (without speech marks).
Note that if you want to change your resolution you can do so in the text string above under the resolution line (mine is 1600x900).
In case anyone wants to play BFME 1 and is having similar issues, follow the same steps except use the following text:
AllHealthBars = yes
AlternateMouseSetup = no
AmbientVolume = 50
AudioLOD = High
Brightness = 50
FixedStaticGameLOD = UltraHigh
FlashTutorial = 0
HasSeenLogoMovies = yes
HeatEffects = yes
IdealStaticGameLOD = Low
IsThreadedLoad = yes
MovieVolume = 70
MusicVolume = 70
Resolution = 1600 900
SFXVolume = 70
ScrollFactor = 50
StaticGameLOD = UltraHigh
TimesInGame = 63
UnitDecals = yes
UseEAX3 = no
VoiceVolume = 70
Again save this notepad file as "options.ini" making sure that .ini is the file type.
Save this in the folder "My Battle for Middle-earth Files" within "C:\Users...\AppData\Roaming". You may need to create the folder yourself (without speech marks).