1: I would say that's really only the smart thing to do. I can't say for sure if they'll start a forest fire, but it's entirely probable.
2: You can kill anything with crossbows. The question you're asking is, "are crossbows a good way to kill Fire Men and similar beasts." The answer is "no, but they beat most of the alternatives." If you have to confront Fire Men on open field combat, you're screwed. Your only hopes are marksdwarves with high-quality bolts of steel (or even Adamantine if you can spare it!) that do decent raw damage, since you won't be scoring any critical hits. For melee combat, use battle axes and short swords - piercing spears are worse than useless, and they can't be stunned by hammers. Battle axes and short swords have the best critical chance with a critical hit that will mean something (a severed limb.)
Defensively combating them is another matter. It's a relatively trivial matter to lure them into a killing field consisting of a long corridor with a ballasta battery far enough behind fortifications that they won't interrupt your siege engineers and can't throw fireballs that far.
3:
Read the gorram wiki. In short, yes, every drop of water on that map will be salt water. All is not lost! You
can create desalinated water - Dwarven screw-pumps fortitutiously incorporate a Dwarven Desalinzation Plant. (And here we IRL go through the trouble of boiling and distilling it.) You just have to make sure that
at no point does the water touch any natural surface. To make absolutely sure, build a Dwarven Water Tower and step the water up several Z-levels with pumps. However, if you then want to use Dwarven Plumbing to route the water so sourced back into a more convienant location (unless you want to segue your oceanside volcano with a flying fortress megaproject, of course), you'll need to remember that if it touches a natural surface, it will all become salinated again.
4: Don't forget your bauxite Fortifications or steel Grates when channeling magma to your magma smelters. Always remember to leave a way to easily expand any magmawerks you intend to make.
Never do engravings on a floor that magma will be passing over - if you get someone rolling a Masterwork on the floor, the magma will obliterate it, and he'll get pissed off. Wall engravings are fine. If you intend to use the magma as a "get rid of stuff" option without dumping it straight into the magma flow at the bottom of the map, remember that temperature must be on before objects will melt/burn away.
For extra Fun, you can use the same liquid-stepping techniques on lava, but the components will, naturally, have to be Bauxite and steel. You can do this and make a hilarious mechanism that steps them above the fort and channels it around the fort, so you can give the besieging hordes a nice
lava shower, by creative use of hatches and levers. Make sure to
test everything you are planning to use magma in at least once as a dry-run. Even better is if you can charge the system with water for a nonlethal wet run. Remember, it's easier to solve a water oops than a magma oops.
Never leave any system automated without some
remote means of shutting it off - preferably you should be able to shut off any individual link without disabling the whole system. Take advantage of the [N]otes features to write down Notes about important stuff - once your Lever Hell gets going, the last thing you want to do is confuse the "charge the system with magma" lever with the "test the hatches" lever half-way through construction and then find out that you rigged it so that once it starts, it won't stop.
Ultimately, working with liquid hot magma is something for which there will be many Learning Experiences. (These will be Fun.) Don't take it too hard if something goes wrong.
And remember - you have Magma
and an ocean on the same map. Megaprojects ahoy! Cast obsidian Doom Fortresses beneath the sea!
Lastly, you're probably going to have a bitch of a time getting below the aquifers. Your volcano, however, will actually solve that problem for you, provided you can bypass the peska magman problem. Use
Obsidian Caissons to do the job. Remember to start with a Largeass Pit, because each time you have to go down a layer, you
will have to shrink the pit. The result will be something like a quarry, much wider at the top than at the bottom.