I will direct you again to my qualification about fortifications on the same z-level as the attackers. I agree that fortifications one z-level up from attackers do seem to offer some benefit.
Everyone-
it is my humble theory that fortifications (arrow loops) in Dwarf Fortress work much as they do in real life. That is, the further away from them you are, the harder it is to shoot through them. Which isn't such a brilliant theory, given that it's on the wiki- but what I'm trying to say is, the penalties are based purely on range.
Clearly, the way a loophole works is that the defender (your dwarf) is standing right next to it, and thus suffers no penalty, while the attacker (the goblins) are closing from a distance, and thus have a big penalty. The penalty is based
purely on range and applies equally to your dwarf and the goblin. Thus if the goblin gets ajacent to the loophole, he can "shoot them through their own loopholes," a scenario that happened more then once in real life combat both medieval and modern.
The point I'm driving at here is that raising your dwarves up one z-level increases the range by one. Additionally, that's range that the goblins cannot close simply by walking up to it. So raising your dwarves multiple Z-levels will have a benefit, because it's increasing the range. The way I understand it, the current game mechanics don't consider distance gained by z-levels different then horizontal distance, so having your fortifications 5 z-levels up is effectively the same as having your fortifications on z-level one, and having a moat five spaces away. The only difference is that the tower has a blind zone near it's base; but that is the perfect place for traps. (Ever wonder why the Germans in "Saving Private Ryan" didn't have some land mines at the base of their big concrete towers? Me too.)