Abstracting fort's population is gotta be more difficult without losing resolution, though, but entirely possible.
Old-school miniatures gaming did this in a semi-abstract fashion. One physical miniature would often represent 5, 10 or even 20 men; few gamers could afford (store, transport, etc.) enough actual minis for even a late-period 1,040 man legion, let alone a pre-Marian one of over 5,000 combat effective plus support, auxiliaries, train, etc. Yet, for simplicity's sake, combat was frequently resolved as if the minis were individuals once formations were broken. Many computer games have similar abstractions; a "worker" unit off collecting wood or minerals or constructing a building would logically represent many such workers in a more realistic depiction; but simplified to increase FPS and decrease micro-management.
DF sort of does this already; 7 people is far too small to start a reasonable colony, and a hamlet of 100-200 people would not usually be nearly so self-sufficient in a wide variety of industries, for instance. If you mentally scale populations up by a factor of 10 or so things make more logical sense. In some senses the Hill Dwarf integration is supposed to help cover the above; the player's fort effectively being the "keep" and industrial hub for a much larger community.
I've got some comments on medieval combat for another time; in short, pre-1400 manuals are quite scarce, and much of what we think of as "medieval" dates from much later than DF's close date. Even the famous
Liechtenauer tradition / corpus is largely comprised of later works, although the core dates back to the proper period. (And note re: another diversion:
Paulus Kal's famous
list of Fencing Masters includes
Ott Jud, "wrestling master to the rulers of Austria".) One of my holiday projects is to go over copies of and commentary on
I.33, which is arguably both one of the most DF-appropriate and one of the earliest Fechtbuch (combat manuals).
In another direction, DF combat is more often like Celtic or Frankish tribes squabbling amongst themselves than organized, trained Roman tactics. Very small numbers, no formations to speak of, individual "heroes" who are dramatically more effective than the ordinary rabble, etc. We don't really *have* armies until the Army Arc; what we've got are more roving bands of surly bandits.
It's nearly certain that the near-lack of attacks in some situations is not a *balance* issue, but a *bug*; or more likely a whole series of them. Generation and movement of world-map "armies" is fairly new and quite fiddly still; I have a vague suspicion that some of the "army with no valid orders" errors may be due to either their source or target being taken over while they are in route, for instance. But there are still valid questions about how often serious attacks *should* happen, once bugs are fixed.
Goblins don't need to eat or drink. Think about that for a moment. One of the reasons is so that they can build up huge populations in evil and/or inhospitable areas, and don't need to worry about a supply train when attacking things like glacier fortresses. They are frequently ruled by demons; one of the difficulties may be that the major overhaul to demons in recent versions has made them far more interesting for adventurers, but perhaps less effective at leading their goblin subjects to war. Looking ahead, one logical way of controlling things is to have goblins act (attack) in a more "video game" like fashion, without regard for politics or logistics, unlike other races; this would allow players to generate worlds and pick locations with more or less such attacks as fits their preferences. Of course, purely human politics created, and purely realistic logistics supported, the so-called "
Hundred Years' War" period. By all accounts it was a terrible time to be (briefly) alive; but fairly interesting from a military history standpoint, and the earlier parts of it are period for DF.
One fascinating "end game" scenario might be that if you have a demon-ruled goblin civ nearby when you breach HFS, they might drop everything to besiege you, led by their dark ruler in person.