They are great in small units: I used to use mine in units of 7 in a single rank: they were massively cheap but would make a dent in any unit they hit. In the flanks of the army they'll massacre almost anything they meet while they are also great if supporting bigger ranked up infantry blocks that suffer from low offensive output (spearmen and PGs).
If you are going for a big block of SMs then I would advise either taking a high lv life wizard to give them regen or +2/4 toughness (and possibly regrow some models) or taking a large number of fast 'hunter' units such as silver helms and eagles: eagles can kill warmachines or hold ranged units for a turn or 2 (depending on how poor they are the eagle can often win, especially in the flank) while the silverhelms can kill weak units or hold stronger units.
In your example of the wizard I would say that eagles are massively better then archers: the archers would have to spend many turns firing at almost any units to make much of a dent (looking at 24+ shots to even cause a panic check in something like a 20 strong clanrat unit) and more like 75 shots before they're becoming likely to fail it.
On the other hand a pair of eagles charging that unit, especially if at least one of them is in a flank, should win/draw (and leave at least 1 unbroken) the fight for a few rounds stopping magic for a few turns until the SMs are in combat. Against skaven eagles also have the fun time of charging and easily killing weapons teams and then overrunning into infantry units to guarantee them missing a turn of moving/shooting/offensive magic
In my list, I have a rather large unit of Swordmasters, 16 in fact, and hope to use magical buffs to keep it alive. One problem, I don't get first turn then they die.
If you're having this issue then deploy in terrain (such as a forest) and have a hero with the sacred incense. -2 to shooting means they'll take almost no damage from most shooting and if you have a mage with a dispel scroll (could even be the model with sacred incense) then you're magical defence is about as solid as it gets in low points games.
I would also think about trying to up those SMs to at least 20 (to run 7*3 needing either 1+ characters or an extra model). Those few extra models means you can take a few more casualties and still be strong enough to do serious damage.