around fresh water sources
Yes but not on top of them!
The buildings need not be in the water of course, but at least I love cities built "on top" of river mouths.
They are very nice sites to play fortress in as you get both neighbors, river fauna and sealife there.
Most modern megacities are literally built "on top of" major river mouths and have expanded along riverways. Rivers and especially river deltas provide plenty of food in great variety and transportation to benefit said cities. Also Icelandic cities benefit of volcanic activity in the form of free heating, useful for farming, including tropical fruits and such.
I for one also hope to someday find a biome in DF that would have a mixture of areas both tropical and arctic with volcanic activity maybe effecting the patch of tropical life there. - A forgotten tropical valley in a barren arctic wasteland with dinosaurs maybe? - It would provide a large variety of fauna and be very interesting site to play in. The worldgen could be scripted to provide at least one such site!
I only play fortress mode, preferably always until I colonize hell or hit FPS death, and interesting sites are what keeps the game interesting to me.
So please, cities on top of water, heck, cities under the sea floor too for me, please!
Forgot to mention: cities in caves would be cool too! Snakemen cultures and magmamen towns!
We already have the Zombie fortress underground. Dagonish-fishmen could have a town too under sea ground!
The building styles could vary a bit more though.
Here is a picture of a human city built atop a river mouth in the world map, it has a very nice wooden bridge to cross the river with too!
So don't abandon cities built atop rivers! They're extremely nice places to live in, when humans take their the toll of ambushers too. And none of their buildings reside IN the said major river.