I've always thought it was a bit iffy that dwarves make things, then ignore them and use them just for trading. I actually got quite upset when I first noticed everyone was naked 8 years in. It's not like they'd use up everything and have none left for trading; you've got 5000 stone rings and sceptres sitting in a box. I'd like to see my dwarves getting some bling on. I did notice my mayor was fully kitted up in shinies the other day, so perhaps my dream is already half realized.
One of the major things I think would be nice are being able to use those instruments you can make. Give a dwarf a musical ability skill, so when they have no job or a break or completely idle peasant, they pick up one of your iron drums or stone flutes, take it to a meeting area and have a play. This could be pretty interesting as it could lead to a whole lot of things, such as giving a dwarf a happy thought. And carve sheet music into tablets at the craftshop so that everyone can play different instruments to the same song. It's like a dorf jamboree. Dwarf Fortress is about roleplaying after all. Could make a dwarven heavy metal band, but they'd probably want to hog all the leather.
We've got all these craftables, yet just for trading.
What about all the kids? Well you just craft him up a wooden toy boat, hours of fun. Especially when he starts throwing it across the dining room and causing tantrums when it hits the emotionally unstable military commander.
I'd also like to see totems implemented as statues, because they're usually highly religious due to their sacrificial nature. The cult of puppyskull. I know you can individually pile them as decoration, but the dwarves don't see them. They only like to see built stuff. It'd also be cool if you could issue a statue or engraving to be made based on a certain, selectable event, like, say, the aforementioned military commander going on a rampage.
Speaking of highly religious some kind of alter would be nice. When you've got a highly successful fortress, you just want to start up the roleplay machine and not stop until everyone is sarcrificed to Bomrek the god of trading and murder. Hell of a combination.
One more furniture item I'd like to see is railings. Something a dwarf doesn't normally move through, but can jump over when running, like, for instance, from goblins or !!science!!. I know it's very undorfly, I mean, why should this magma pit be protected? It's just be nice to see them grab onto the railing for once, instead of dodging straight off the cliff into the death pit. Who jumps into a death pit? This is not Sparta. They could also be used for decoration. For example, I recently constructed an above ground inn for the celebrating. This is mainly what prompted the performing musician idea, but the upstairs of the inn has a balcony, which is basically just open. That's dangerous.
With railings, you could just pick a side of a square to put it in, sort of like you choose the direction certain constructions are facing.
Dwarves take things as their possessions, but they just throw them on the ground in their room or shove them in a cupboard. What are they, teenagers? You're 105 years old, Urist, you should treasure your posessions since you've only accumulated an amulet and a sock for your entire life. I'd also like a bit more control over specific gem encrusting.
My noble dwarf had an accident, now he needs a crutch. Amethyst encrusted crutch it is then! Or you know, solid gold.
My major point here, is that I'd like to see more when I go to the inventory screen of my less militarized dwarves other than a few muskox leather shoes and rope reed socks. Dwarves should enjoy the craftables as well, other than spam the stockpiles with rubbish. The dwarves have this complex "I like" list, like, Urist McShinythings likes shiny things, but they don't do anything about it unless you specifically give it to them. This might be all very complicated, but it would definitely gives the dwarves something to do after raiding the elven caravan. All those crafts.
"What'd you get from the elves Urist? I got a toy boat."
"I have a wooden drum. LET ME PLAY YOU THE SONG OF MY PEOPLE."