My site cap was also reached in worldgen (don't they do that always..?) but I'm getting new hillocks every other month or so.
I think it's dependent on how low you set the cap at worldgen and on how long do you let it run.
Probably possible in advanced settings, I've used standard settings though (the cap was 1040), which seems to fill the quota even in relatively short history. I can imagine the cap not being reached in worldgen, but in most standard settings it would be, so it
can can't be preventing hillocks.
Also, regarding destroyed sites, they still exist, just are not quite active. I suppose the cap is meant only for worldgen. Anyway, in less than a year, I've got six hillocks, and my wealth is about 8.8 million.
If hillocks spawning is not affected by the maximum number of sites setting I don't understand why I'm not getting any, there is available land near my fort (grasslands, hills, and mountains at a day's travel or less).
I've also noticed something weird when I accepted the barony. The barony it's not actually my fort, but my only economically linked site (a half my population dwarven hillock of my own civ just half a day travel). Does anyone has also seen this? It's supposed to be normal? Could be that the reason why I'm not getting any new hillock?
But where is the baron? Maybe the guy you accepted was sent to the hillocks in time between accepting and establishing, and this messed things up?