Any sentient creature of the same species can have children if they are married and not gay/sterile (which happens more often than you might think.) If you're serious about this, you need TONS of whatever blocks you're building out of. But it isn't uncommon for people to do above ground forts as a challenge. There are plenty of Lets Plays about it. Also be aware that it may take you a long time to get residents of different species, or at least, enough to have a stable population of goblins/elves/whatever. Remember, having 2 of the same species isn't enough, they need to be married.
You should also be aware that anything above ground is considered outdoors for the purposes of temperature and farming, even if it's technically indoors. So don't put any waterfalls up there if you live somewhere cold enough for water to freeze in the winter. Otherwise you'll get some dwarf/elf/whatever playing in the waterfall and then vanishing/dying as the water they're in instantly freezes. I've had it happen more than once.
Your citizens have their own population cap. The vistor, invasion, and monarch (should you grow rich enough, or dig deep enough to get a monarch) all have their own caps and ignore your population cap. Although the monarch's entourage that would normally accompany the monarch to your fort is affected by your population cap, strangely.
Maybe 30-40 dwarves is enough to take out the clowns if you have very good equipment, training, and add some things (traps, siege weapons, ridiculous domesticated war creatures, etc.)to swing the tide in your favor. If your dwarves aren't legendary in their chosen weapon skill, dodging, and striking, I wouldn't attempt it until after that's happened. After you actually get to the fun stuff you'll need to have a permanent squad wherever you put the breach, as small troupes of clowns will still come through periodically. Also, don't try using dwarven atom smashers, they don't work on things as big as the clowns.
You may also want to have an emergency measure in case your squads fail. An artifact door (artifacts can't be destroyed), will stop the clowns from leveling your base. If you don't have one then you'll either need to have an emergency lever that leads to a collapse switch, or a bunch of idling dwarves to just build a wall before the clowns get to your main base.
Don't forget to have plenty of slabs to engrave if you can't retrieve your dwarf's bodies. You wouldn't want your captain of the guard coming back as a vengeful ghost. Build slabs at a mason, then engrave them with the dwarf's name at a crafts workshop, then place the slab, but pres x on the slab menu to expand the list and see EXACTLY which slab you're placing (this way you won't place an unengraved slab instead of a memorial slab). You must do this to each individual dwarf you can't bury, and it takes awhile if you, say, lost 40 of them to the clowns. Your memorial slabs can also be turned into memorial gardens (basically the same as a statue garden), by pressing 'q' around one of your engraved slabs.