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That's largely my take on it. The Narn will stomp the LoNAW when they get in a fight, the problem will just be the size of the LoNAW and bringing it to a fight. It's not like fighting the Centauri or Humans where you can focus all your attention on a single world and drive for it. The LoNAW will be a constant struggle to defeat one member and keep them down while moving on to the next. The Narn will likely win but the LoNAW could possibly make the war so distasteful that they could pull out a draw.

Guys, as much as I like the Narn, I'm gonna have to give this one to the LoNAW by a narrow victory.

As Deep stated, the Leagues ships are weaker overall, and the Narn would win most fleet engagements, but the League has the resources to replace their losses very quickly, or increase production, or purchase more ships from other powers (I could see the CR willing to supply weapons and ships for a war against the Narn).

At this time, the Narn are still rebuilding from the Centauri revolution, and while they have a fleet strong enough to make the Centauri think twice about an invasion, its not big enough to achieve the objectives needed. They lack the manpower to persecute a war against all the homeworlds as was already stated, but also lack the manpower to put enough boots on the ground to successfully occupy them as needed. The Narn don't seem willing to commit mass murder with WMDs so I don't see what they could do beyond blast the League's fleet to hell.

I see these fights going much like the proverbial wolfpack fighting the bear. The League will circle around, and worry at them, wear away their reserves until they can't fight anymore, until they have lost so many assets as to put them in a position of vulnerability to the CR. At that point, while I doubt the Narn would surrender, they would seek to withdraw and end the war.

Of course, I don't see the League as achieving total military victory and occupation either. Backing a Narn into a cornor is deadly, and would cost them so highly they may choose to accept a peace treaty at this point.