As far as I can see, irrigation is like, you make a tunnel between your farming area and a square away from a nearby water source. Then you get a mason or a woodworker to make a floodgate in their respective workshops, then also make a lever. You also need three (I think) mechanisms from a mechanic's workshop.
You put the floodgate near the opening to the farming area, then put the lever someplace on the other side of the farming area, then link the lever to the floodgate using the mechanisms. After that you dig the last bit of stone/dirt away so that the water can come through the channel, and close the floodgates. If you want extra control you can make two floodgates, one near the pone, another near the farms. Then if anything strange happens to your irrigation channel you can close the one near the pond so that a dorf can try to fix it.
After that is in place and there is water behind the floodgate near your farm you flip the lever to open the gate, wait for water to cover your farming plots, then switch the lever again to close the floodgates. After the water dries up you will have muddy water over your plots and your crops will grow better.
This is the way I do it, and it seems to work ok!
Also, with the massive amount of stone you're collecting you should be making doors, tables, throne chairs, statues, all the workshops that you need, bridges, levers, that sort of thing. Basically only make things out of wood if you can not make them out of stone. The wiki says somewhere that it's something like only beds and buckets and a couple of other things can't be made out of stone.
My main dining hall for the 7 original dorfs was 8 tables and 8 thrones, with a stone door on the opening to it. I had another stone door on every room that I made, because apparently dorfs like being enclosed and don't like rooms without doors as much as ones with them. Then there's the stone mechanisms for the traps, stonefall traps, the mason's workshop, the mechanic's workshop, the fishery, and the kitchen all made out of stone. Um, oh I also had to make a couple of stone bridges for ease of access to places and such. It all eats away at the stone pile. You can also allocate a shitload of space off outside your fortress to be a stone stockpile. Then people will lug it all out of the way. If you make a big out outside and a smaller one inside then you can choose to take from the smaller one when you are constructing things.
As for the caravans, I believe that you need to create at least a dirt road from your fortress to a side of your map. I can't remember if you can make it out of stone, but I guess if you can do that you will also tackle your stone problem while making the road
As for the location, well I am still not really sure about that. I think there is a fair bit of experience required to choose a good location, and maybe a fair bit of luck too. It seems pretty hard to me. One good thing that makes it a bit easier is using the um, "u,h,l & m" keys (I think? something like that, it tells you at the start) when choosing your starting location, because you can move the little square about in the minimap that ultimately defines where on the little minimap you're going to be settling. I try to settle on the edge of a mountain near some trees and a river. Not sure how to find magma yet, I guess that is something for the future.
