I know it's not particularly dwarfy, but in a game that strives to be so realistic, there are a lot of qualities of trees that cannot be exploited.
Wood Material Properties:
The
Wood Database and other sites have material properties for many kinds of wood.
Different classes of trees:
Wood can be divided into different classes, softwood, hardwood, ironwood and economic woods, like ebony or calamander. Some woods are well suited for striking weapons, and in a fantasy game, there could be trees with metal-like properties that would be ideal for weapons and armor. When such woods exist, Dwarves should be able to make weapons like staffs and clubs out of them, and there should be a way to make sure they are made from weapons-grade wood. Also, our buddies the elves should be able to preferentially produce weapons and armor from weapons-grade wood. They might be worth keeping around if they can trade us some grown ironwood swords and blackwood cudgels.
Tapping Trees:
Trees can be tapped for various substances, for example maple trees produce syrup, gum trees produce latex, rosewoods produce perfume oil and diesel trees produce diesel fuel. Perhaps a fantasy tree could be tapped to produce booze or magma. Dwarves could produce a tap item at a workshop, attach it to a tree, and come back to collect the tapped materials when they are filled. In the real world, bears are known to pillage maple syrup taps, which would be amusing in DF.
Wood Improvements:
Wood is typically improved with substances like varnish, paint and lacquer. I think varnish is just oil. Tempera paints are ancient and could consist of eggs or milk and dye. Lacquer-ware is complicated and would an interesting industry to explore.
Aging:
Apparently, a lot of woods change color as they age. For example, teak goes from red to brown to grey. It seems like an easy thing to add, as long as it doesn't affect FPS.
Aroma:
A lot of valuable woods apparently have pleasant aromas, like rosewood. Not sure if there's a slick way to represent this in DF.
Tree Farming:
Tree farming is definitely a real industry, and we should be able to do it. Maybe something like a 3x3 or 5x5 zone where one plants a single tree. Trees could be grown from seeds, or saplings could be transplanted. The tree could be set to automatically tap, collect fruit, or cut down at a certain size. Trees could also be planted decoratively, this would involve giving dwarves a happy thought when passing by them, maybe like a statue garden. Some trees, like magnolias or palm trees, could have a higher decorative value.
I know some of these would be possible to do with modding, and I plan to start trying some of them myself, if I can find the time.