w/ Dormitories, if you make the beds (overlapping) bedrooms then dwarves will claim them, and this will get rid of the unhappy thought for sleeping in the dirt, and for not sleeping in a proper bedroom (by which the dwarf means, he slept in a bed which he hadn't claimed - that's all it means). Nobles wont like this arrangement (they have a different unhappy thought, about how shite the bedroom they slept in was), but commoners expect nothing at all in terms of room value. If you want to boost room value (and it does give positive happy thoughts "slept in a good bedroom") a highly effective and thematically appropriate way is to install high-value weapons in weapon traps, especially things like steel spiked balls (which can fetch 10000 dwarfbucks), even shared over 40 beds it provides 250 value per room, which is quite decent. So allow dwarves to claim beds in your dorms, install some decorative weapon traps and upright spikes, and they'll be happy little spartans.
On leather armor, it's pretty bad but it's better than nothing. One nice thing is that it's pretty easy to train up leatherworker (by bulk-ordering leather from the liaison and mass producing waterskins (best) or foot or handwear (second best)) so you can make masterwork leather easily enough. Also, it has the advantage of being very light.
edit: I should also note, if you want to be viable in combat, you'll really want some serious training. Weapon skill provides parrying, and shield provides blocking, between parrying and blocking, a legendary-level military dwarf can eliminate a great deal of incoming damage. Without that kind of skill level you will suffer awful attrition.