So I'm assuming the opposing army would have all been killed, captured or fled but then what would the successful army do? Give properties in this new city to their own citizens? Would the civilians have been killed? If yes then wouldn't killing the occupants (metal workers, traders, farmers etc) make the city worth far less than before? Did the winning army leave people there and then continue their march or would they have recruited more people from that area to join? Or was it all just a matter of subduing the army there and then moving on and letting that city art it out self out?
I'm just running out the door, unfortunately, so this answer will be very brief. If you give me a reminder tomorrow I might be able to provide more details then.
Essentially you have the right idea if a city was taken by assault. If a city was taken pretty much everyone in the city would have been killed. Some accounts of sieges explicitly say everyone was killed (Jerusalem being the most famous) while others it was just a lot of people. There has been some argument recently that the first hand accounts of city massacres (like at Jerusalem) may have been slightly exaggerated but the distinction really isn't that big (the difference between killing 100% of occupants and 80% probably wouldn't have felt that great to people living there). The city would then have been repopulated with people who were considered more loyal to the victorious side.
Whether the army would keep marching on really depended on the individual campaign. Some campaigns were for the explicit purpose of taking an individual city, others would leave behind part of their force to defend the city and then move on.
There's a significant distinction here, though, if a city surrendered. If a city surrendered sometimes the population would be expelled, possibly with a handful of executions of major figures, but often much of the population would be kept on. The total massacre of cities that had to be taken by force helped to encourage negotiated surrender.
I wrote a slightly longer post about sieges here you might be interested in reading.