You can sanely handle 1000 dwarves in 1x1 across 2z with everyone getting bed, table, chair and coffin, let alone 4x16 or 16x16
1000 across 16x16... Every dwarf can get 23x24 tower for personal living spaces, food and booze production, training and crafting needs. Mining into the earth, you'll get 138 rocks per z-level per tower you mine - which can last for quite a long while, as Dame de la Licorne can attest.
(Hm, at 10 steps per square, a dwarf will take 9 days to walk from one corner to another - or around the same time as walking through a single 48x48 size single-wide tunnel that snakes from one edge to other.)
One potential megaproject idea: dig a spiral around the entire embark with center of spiral acting as entrance. An invading army will have to walk ~288800 tiles, assuming you kept 4 off from the map edge - which should take them over 7 in-game years at dwarf walking speed.
See how many different attackers you can fit in.
Heck, if you layer several, you can use old age as defensive weapon against human armies. (Though you may not get to see all of them at once.)
(Also, that's longer than my home country is wide at it's widest point...Sheesh.)