So both the shadow AND the Cast flag should be set?. I am very grateful for this info. I will experiment with different sun/ambient settings and see if it helps..
The other thing is, if you own A7 commercial and have downloaded the new public beta, 7.10.1, you should be able to use the accompanying soft shadow shader on your models, look up in the manual to learn how to implement it.
But basically what it will do is blur the harsh lines stencil shadows produce, making them a lot softer and more bearable