Arty being used to target the commanding general is a no-no. What does this mean? It measn that my commanding general (CG) is safe from
pointed arty fire, the player who places their commanding general in the heat of battle, near massed units for example has a chance of that general being killed.
Do people target the CG with arty? I'm sure they do, it is hard to tell in the fire-fight where arty rounds are meant to be directed.
In NTW1 I learned that a commanding general could be used as a scout, without arty fire being aimed at him - however! - that did not mean the lancers couldn't run him down. I learned this the hard way. The same goes for musket fire (Dury and Carson

).
Now, people do this trhing of saying "my arty is on auto-fire" when a CG gets close. If it is the beginning of a battle with no line or cav units engaged, then surely a bit of scouting is allowed? That a player would threaten with "arty on auto-fire" shows that that person doesn't want to play NTW to its fullest and that they are not too keen on taking an imagative approach to killing off a very prized unit.
CG as shields? Pfft, if you want to endanger your GC in this way go for it.

That's a player's choice. NTW2 does offer the player to move their CG out of harm's way, or even better, of taking another general who can be used in combat with a moral bonus. Not a bad trade-off if you ask me. I really only notice this indirectly though. For instance when the fighting gets tough and you have you arty follow a large marching column of men that are retreating to the CG's position. In this case a CG finds himself endangered due to arty rounds smashing after the large mass of infantry near him.
(Of course, you can go out of your way to say "hey buddy, I want to kill your OG move your gen". This is harmful for the player telling the other player to move because you give away your actions, something you want to keep under wraps ingame. Secondly, it cuts down on much needed time to type the message. Thirdly if the player being asked to move is sneaky they can use this CG shield in front of other units to annoy the asking player. This can spiral into the pettiness we so often see on the field. I feel that if a vet player knows this rule, they know to keep their CG out of the fire fight, to not expose him to undue harm. Yes it is some mirco-management but a vet player can do it no sweat and the new folks learn in time. I did.)
Played a game this evening/morning where this happened. I had ordered my arty to fire on a large mass of cav and infatry who were moving forward. fter a whle this same mass of men fell back with me on the move as well. My arty kept firing at the orginal target (some horsemen) and they ended up passing and then stopping right close near the CG. I did not know this until the little full-size image showed up and I think the player didn't know it either. I did not purposely target this CG, but I did kill him because his location was very close to the orginal target.
Is this cheating? Depends who you ask. For me, it was a honest mishap. I did not target the CG but he died all the same from arty fire. That player might say that I knowingly did target the CG. A third party might go back and find out that it was neither via a replay.
As Moopere kindly points out, this game is filled with loopholes. Things we cannot mod and must work around. Wile the CG does add flavour and fun to the game it presents oppurtunities to be vile. Of course, historically speaking what person wouldn't want to wipe out a CG with arty? It is the character of the player who decides ultimately if the CG dies from arty purposely or accidently. It is also up to the person who lost their CG from arty to play on or to cause a fuss. And! it is up to the people joining the game to sort who the good (by good I mean fairly honest) players are and who likes to use the loopholes.