Two tile reach for longer weapons has been suggested before.
I think Dwarf Fortress could go beyond simple 2-tile reach and actually calculate advantages down to cm distance. There is an old saying in the kung fu world, that One inch longer is one inch stronger and One inch shorter is one inch trickier. DF is exactly the kind of game/simulation that should capitalize on that philosophy. A short spear and a dagger might both have 1 tile of reach, but a fight between the two weapons is not that simple.
Calculating reach would definitely be more realistic, and I think you could achieve range effectiveness with some simple numerical calculations. This could make Wrestlers more useful. If a Wrestler gets close to an opponent with a weapon like a spear, the spear becomes almost useless while the wrestler can do whatever.
You should weave this into DF's multiple attack possibilities. A spear's thrust might be long reach while a pole bash could be short reach.
If you are truly interested in realistic weapons, many ancient and medieval weapons (especially by the 1400s, DF's tech cap date) had some kind of extra hurty part on the handle for dealing with the eventuality of close combat. For example, Greek "Dory" spears had a spike on the weilder's end known as a sauroter or styrax for offing people on the ground; Japanese naginata and Chinese guandao had heavy counter weights on the wielder's end which could be used for bash attacks; The counter-balanced pommel of long swords were used to "pummel" when too close to slash; The pommels of Indian swords had spikes; Chinese hook swords also had bladed hand guards for close combat;
In GURPS, switching from attack to attack sometimes requires the wielder to spend time changing his grip on the weapon.
Assuming all weapons are capable of some form of close attack, you might split Wrestling into Unarmed Combat and Close Combat.
If there's an ideal attack distance, there should also be an ideal parrying distance. A spear or axe can parry attacks at the distance of their metal parts, but not their shafts, assuming the shafts are wooden, which I guess they might not be for dwarves.
I would assume there'd be different types of weapons that specialize in long reach, medium reach or close combat. I've always thought of the Dwarven spears we have now as relatively short spears like the ones that the Spartans use in 300, and not like the Viking Age or late Medieval long spears.
Reach Weapons
Lance (spear-like polearm)
Flail (mace-like polearm)
Halberd (axe-like polearm)
Pole-Hammer or Quarterstaff (hammer-like polearm) (note that unlike the crappy quarterstaffs of fantasyRPGland, real military quarterstaffs and similar weapons often had metal parts, and authors like George Silver of the 1600s considered quarterstaffs to be the best of weapons)
Close Weapons
Dagger
Knuckle Duster
Hand Claw
Spiked Gauntlet
Punching AxeLùjiǎodāo (I've heard this named Deerhorn Knives, Meridian Axe, Duck Axe and other things)
Sidearms could easily be selected from the equipment page on the military screen. Dwarves would bring one weapon of each reach category. In combat, they'd start with longest reach and move down to medium or close reach as needed. Dwarves without sidearms would use their weapon's close range attack variation.