That's fine, I found myself doing the same thing and keeping my settlements native because every Dwarf counts
, The reason I am considering Orodengrin as a candidate for population replacement is because you need to reclaim it and you need to wait a long time to build the population up. You don't have any long range units in the Iron Hills as well, and the Orcs are a match for your limited numbers. Mercenaries are useful but a stopgap at best, since you can't replace them unless you can hire more. Recruiting tons of dwarven units, while powerful will depopulate you very quickly and leave you unable to retrain units who suffer losses, so you have to think carefully.
Hirelings should not be treated as replacements for Dwarves, but as a means to fill out an existing Dwarf army, overcome the limitations they have and provide additional man power. But development will take time, which is why you need to use the economy to your advantage here, you'll not be expanding much, or recruiting much either, so more money to use on settlement development, you shouldn't have to wait to build anything when you have plenty of money. It is a vastly different experience to what you will be used to in a TW game, and it does take some getting used too
I have had to fight the temptation to expand like hell and then realizing I've overextended myself.
Tl;dr - Our economy is awesome but balanced by the fact we can't recruit units as we please and settlement development takes time.