I think that clay walls should certainly be smoothable, without question. On the other end of the spectrum, I'm not sure that simply packing or ramming sand walls would suffice. That said, I'm not sure that sand tunnels would be very stable without supports every few squares, and all of the soil-type substances should be quite permeable to ground-water streams and the like; we may be more in the realm of unfinished business than that of improvement.
It would perhaps be nice to be able to stucco the walls with some sort of substance, but there we're getting into significant additions of code; a new digging designation, a new substance, probably a new workshop — although perhaps one could make buckets of whitewash at the ashery, and then one could play Hobbit Fortress instead — and I can't really see it happening unless Toady decides that the dwarves really, really need pottery. Which is somewhat unlike the dwarves I imagine, at any rate; most dwarves would rather starve than eat out of a bowl made of dirt rather than good solid stone. And, at any rate, I don't think this would happen until and unless the dwarves were using the finished goods in everyday life. Bottling wine in clay amphoras for export to the humans, perhaps.
Which makes me think; those mushrooms should have a quality value, hidden or no; also, mushroom beds require a year-round substructure of fungus, really shouldn't be rotating crops with them. Mushroom quality affecting wine quality; wine aging and improving in barrels before bottling. Dwarves building private wine cellars. Elves on wine tours!!!
Ahem. You can tell what the main cash crop in my part of the world is.