What would happen if a fortress fell and everyone died before the 1st 2 years were up? Or if just all of the original 7 dwarves were killed?
That's a fair question. In my mind, that would be part of the game. Since the Forii are eternal, I imagine they'd have to create a Minor Clan and wait for their turn to ascend to Major Clan-hood: "Better luck next time". (All the original 7 and all of thier children, I'm assuming you mean.)
That might be part of the regular cycle, where Clans form, rise, fall, get replaced by other Clans, ect... until enough Dwarves have been born or become strong enough that the NPC races and various other deadlies aren't ganking them left and right anymore. I've been following the Human and Goblin civ interactions and they've been busy conquering each-other for the past six in-game years. That's led to a depletion of their overall populations. The Dwarves, on the other hand, have been exploding population-wise with the influx of all these new Clans. Until we get some adventurers out meeting humans or gobs, we won't see those populations start to rise. Besides, their biggest battles are between groups of 12-20. The Dragon has only killed maybe fifteen in the entire history so far, and the Tundra Titan, another dozen-ish, so the booming Dwarven population should be able to absorb those kinds of numbers pretty easily.
There's also the option of getting your Clan together, married and having kids, then intentionally abandoning the original Clan Home so that the Family isn't wiped out by a local necromancer or something. While an existing Clan doesn't get another two years to set up their new Clan Home, that is an option to keep the members of the Clan alive in a period between turns. On your turn, just re-embark at the Clan home and get everybody sleeping under a roof again, and we have basically a nomadic Clan who get together every so often at the Clan Home site for Clan Meets - maybe to determine who the new chosen one will be or something. Another strategy that has been mentioned before is to get some Clan members as Adventurer companions and go retire them in some other place than the Clan-home.
As we've already seen, a few of the Saint Clan have emigrated out to the Stonecleaver Clan-home and have been enjoying their dwarven hospitality. Heck, from what I can tell, one of the recent non-Clan immigrants from The Fair Works has married into the Stonecleaver Clan, but is friends with many of the Saint Clan-members, so there might be an alliance between those two Clans forming already.