I have a kingdom of fighters, mages, halflings, and elves. My fighters and mages attain max rank without a problem because of their training buildings, but the other two races' buildings don't take them that high. When I looked at the unit screen of an elf and a hobbit at the highest level their buildings get them, they had letters after the level number. What do those indicate?

In the version of the rules Stronghold appears to be using (see 1983 basic and expert D&D), demi-humans (elves, dwarves, and halflings) only advance to level 12, 10, and 8 respectively. After that they only gain a few hit points after each level and no other abilities. Dwarves got 3 HP for every level after 12; I don't remember how many the other two got, but it was likely 1 or 2. The letter ranks indicate how many times this occurred, so a level 10C elf would mean they've hit this threshold three times.

They chose to write it this way instead of level 13 since you don't get all the benefits a level would normally afford. It's not very intuitive, and later versions of D&D did away with level limits (and this sort of coding) altogether.