> How do i make a blacksmith or a Smelter that only uses magma from the bottles as fuel?
In Orc mode, you would use the bottles to fill a couple "magma cistern" workshops, and deconstruct the Cistern in a way that it fills a reservoir (suggested to rig up a way to do this remotely such as a cave in from a support). Then build a magma smelter over your reservoir as normal.
I *think* that Meph kept the same system in Dwarf mode except he uses the "Spawn location" workshop.
A 1x1 workshop full of magma should fill about a 3x3 space with magma when deconstructed, if it is surrounded by an empty room (i.e. floors). If walls or empty space is surrounding the workshop that fluid might not all appear.
You need to have discovered natural magma to unlock the magma version of the smelter, you can always just delve deep and then seal up the shaft.
> Is it really rare or did I accidentally turn something off?
Fossils can occur rarely in any stone or commonly in veins or clusters of "ruins". So it's highly likely you have some fossils somewhere on your map, but they might be very sparse. Whether or not you get "ruins" is random like any other mineral, just like you don't get gold in every embark.
I don't think there is any setting that turns the edible Living stone off. It is a cluster in something ... bauxite? If you have Less Solid Rock turned on, it replaces normal bauxite with a different rock also called "living stone" which melts to blood directly. Anyway, whether or not you have layers of bauxite is random too.
The odds of seeing that kind of weird special stuff is probably higher if you turn on simple stones and simple minerals, because then you don't have periclase, limonite, and garnierite competeing for places in the world. Personally I prefer having the garnierite