Yea like others said peasant, hero, and demigod is a playstyle choice. It's not like touhou or something like that where playing on anything but insane is doing it wrong. I personally prefer hero myself, nice reasonable strength, and a better chance of actually arriving at your goal without getting eaten by wolves. Without making stuff that should be hugely dangerous trivial. (Not that wolves aren't dangerous, but compared to everything else out to kill you in this game...)
I personally played for about two months before I started messing with mods. You should probably at least play a little vanilla to get a feel for the flavor. But when you do look for a mod, I would recommend just browsing around the modding forum or the Dwarf Fortress File Depot a bit and see if you find anything you like.
Mods that add adventure mode reactions might be up your alley, since in vanilla there's very little you can do with that right now unless you like sharpening stones. I can't recommend any myself though, since I just mod in my own crap I want and honestly never messed with any for long enough to get an opinion.
Also if you are like me and don't see any mods that suit your particular fancy, browsing the modding forum, reading through some of those bigger threads like the modding workshop, and looking through the wiki would probably be a good way to learn the basics, it's really not as complex as it looks once you learn how those tags work in general. Also if what you want isn't too large or complicated and you ask nicely you might be able to get somebody over there to whip up a little personal mod for you in a few minutes, or at least guide you through how to do it yourself.
P.S. As for mods nullifying awesome moments it depends. If you used some utility to make an adventurer have max stats and max skills and killed a dragon that obviously wouldn't be the same as a vanilla character doing it. It pretty much seems to be more of a how much is the player impressed by the feat thing.
Boatmurdered was as far as I know completely unmodified, it is one of the great stories of DF lasting the test of time. Nist Akath is one of the great stories as well, and that was heavily modified, it was chock full of 'savescumming' and had utilities editing memory data. But it is still an awesome story, and my personal favorite. Awesomeness seems to be as much affected by how the player themselves see it, as others do.
p.s.#2 Next time I take an english class I need to see if I can turn some of these responses in for essay credit.