Just tossing out an idea for when it comes to adding in a bit more of a fantasy flavour that works well with the spirit of the game...
We seem to have here the theme of human kind making a home for themselves in a pretty hostile wilderness, slowly pushing outwards and alterting things for their use. Especially when it comes to deforestation, and the forging of iron, I am reminded of Studio Gibli's Mononoke Hime (Princess Mononoke).
Something from that movie, which I think would really work well here, is the idea that the woods have guardian spirits. Cutting down whole forests could anger them, and lead to attacks. Trying to find a mediation between nature and industry seems to be a concept that would work well with the vision of this game that I think is being pursued (of course I could be wrong!).
In the film, there were also animals (I think intelligent apes) which would plant saplings in an attempt to regrow cut-down forest. I remember a few people suggesting that it would be good if woodlands regrew on their own without the need for replanting (I think this is a necessity myself, with replanting used for more particular needs). Wouldn't it be cool if instead of simply growing randomly, or, perhaps moreover, if a forest is severely depleted, we have some kind of creatures attempting to help re-seed it? Likewise, otherwise neutral or benevolent creatures could turn nasty if their homes are destroyed.