Wrestling in the hands of the AI is mediocre, and mostly up to chance, although they can exploit it for all it's worth if they actually grab something useful for once (like a joint lock or head-gouging with a free hand instead of grabbing random digits or articles of clothing with various portions of their limbs).
In the hands of a player-controlled character, however, wrestling is massively powerful, since the AI cannot recover from having its weapons stolen as of this point in time, and a weaponless character dies horribly to a weapon-wielding character at pretty much any level of skill you are likely to encounter. Of course, this only comes up during Adventure Mode.
I'd recommend just training up swordsdwarves or axedwarves for dwarf mode. Chopping weapons fail against armor of the same material or above ("tiers" run roughly as silver<copper<(iron=bronze)<steel<adamantine), but steel weapons will cut through the armor of any enemy in vanilla DF (since none of them have steel armor), effectively meaning your enemies are unarmored, and chopping weapons are the best against unarmored opponents. They are also the best against critters with no organs to rupture or blood to lose, like bronze colossi or forgotten beasts made out of something sturdy, as a bisection or decapitation is always an instant kill, and can be achieved on an enemy too large to one-hit by lumberjack-style chopping action.