>I have no idea how ranged weapons and ammo works (as making bone or wood bolts seems to have no effect)
Don't bother with bone bolts - they are not produced for some reason. You can definitely make wooden bolts though. You can assign weapon preferences through v-p-s, and if you have a free crossbow a dwarf will pick it up. You can make crossbows at Bowyer's workshop.
>So how do traps work?? I've never been able to figure them out. Can some of you give me some examples of some traps to say, protect a bottle-neck room that's the only entrance to your fortress?
You make traps through building interface, there is Traps/Levers submenu and there you can choose different traps. If you have spare weapons, weapon trap could be effective. Just place it in the corridor that leads into your fortress. Dwarves will avoid it. You can also make some uber-weapons for weapon traps (aka Trap Components) in Metalsmith's shop, which are probably more effectife than obsidian swords.
>Another question. How the hell do you assign squads? I had to pause the game for a good 5 min to order all my troops to help defend where the lizard men were. I'd love to be able to just press x, select a squad, set a guard point, and watch a nice group of troops show up and guard.
Press 'm' then select the squad leader by pressing enter then select other members of the squad by pressing Enter on them. Then press Space to finish assigning a squad.