I'll reply to both of your comments in this one.

I quite like the idea that what I've outlined is all that exists in terms of analogs to humanity.

How's that analogous to humanity?

What you've figured out for the dwarves and their "alcohol" consumptions sounds fantastic! I like how advanced the idea is in terms of creativity.

[Orcs] see the Humans, Dwarves, and Elves as weak for being willing to accept a top down government (Dwarves don't have it but wish to restore it). Not for having different blood, but for having different ideals and traditions.

So, you're saying that for an orc, there's a dichotomy of body and mind, or of blood and ideas? That's quite interesting. I'd like to see where this might lead to.

Or that Orcs and Humans have a normal success rate at bearing a child.

Just a reminder: when talking about fantasy of whatever variety, there is no "normal". You have half-orcs, to say the least! How normal would that be? Consider using "average" instead, to avoid people thinking in terms of the norms they've gotten used to. This may allow for greater immersion.

so it seemed necessary for them to have a way from them to cope with the bad hand they got dealt

Sounds rather anthropocentric, you considering their short lifespan to be a "bad hand". We don't look at turtles and angst about not having to live as long, do we? Their lifespan is what they've successfully dealt with for generations because it's the most natural time of living for them. Don't assign to them the idea in meta-perspective that they "should have had" to live longer. This non-judgemental line of thinking will allow you to make decisions on developing species - or anything, as a matter of fact - that add verisimilitude, which naturally entails greater immersion for the player. Think in terms of what a goblin would think of that instead of a human in the body of a goblin.

Their continued existance given that implies that they must have a deep artistic and philosophical rooting.

That's a leap of logic I can't make. Could you elaborate on your line of thought on the matter?

I assume that pretty much any mortal put on par with the gods would botch everything he touched until it bit him hard enough to learn caution.

That is fair. That being said, it doesn't mean that people must be careless simply because they encounter great power. There might be powerful idiots, of course, but the only reason they haven't been killed by their own hand yet must be pure luck, which isn't how the world works. It's not a Jim Carrey comedy. Figuring out and mastering magic must have taken quite a bit of high-level thought... which makes the idea of waking up whatever creature that dreams the world upstairs utterly ridiculous from the outside perspective.

Speaking of which: your description of the workings of magic is great because it makes a whole lot of sense to me, and I've never seen anything like that personally. Still...

The chain of events that brought mages into the world

is what I'm having trouble with. "Projecting magic" doesn't sound to me like something the creature would do intentionally. I don't know much about the thing, it must be said, but it sounds to me like giving keys to the foundation of the world itself to lesser creatures is bound to cause some problems. I get it when hubris is upon humans, but the eldritch horror you describe surely must be above such petty mistakes! But maybe it's part of its dream and it can live with that.

What makes me wonder is how exactly this projected energy (not to be confused with magic, which is a ritual of using said energy) condenses in any way. I suppose you can mend it easily by saying that the creature just thought more of some places than others, thus giving it more innate power, because it's its dream, not the author's or DM's.

Creating constructed languages feels way out of my depth

You don't have to create a whole language on the spot. I'll tell you a little secret about this process: no one can do it in snap time; it's always a lengthy and tedious process. You can start with simple things, however.

Let's say that there's a preposition "of" in the goblin language (which implies that the language is analytic - that is, uses auxiliary parts of speech to show relationships between parts of the sentence - or, at least, semi-analytical); let's say it's spelled, in transliteration, "ca" or "caa", to make it a bit more alien. Let's also say that "aya" means something goblins would call themselves natively (which might as well be their idea of themselves assigned to a number of symbols: there's nothing inherently "human" about humans), and that it has an objective case form of "ae" (there's a lot to explore with case forms, but let's keep it simple with the English's two-case system). Let's say, lastly, that prepositions that end with a vowel in Goblin have a tendency to get shortened before words starting with a vowel, much like in French ("je aime" becomes "j'aime", but "je mange" stays the way it is). So, we have "Caa Ae", meaning "Of Goblin" ("belonging to goblins"), which gets shortened to "C'ae" due to grammar... and there you have it. Simple, wasn't it? And from that, you can make other short phrases, like "caa ehme"/"c'ehme" being "of human", "caa nyeme" being "of elves" and so on.

Feel free to PM me if you ever decide to venture into constructing languages and/or would like to bounce some ideas of someone. I love working with language and would enjoy cooperating with you on the matter.

I'm starting the campaign about a month after the capital exploded.

Then it's fair that the state hasn't fallen yet. It's also fair to note that, perhaps, with slower means of communication (which one would imagine a fantasy world possessing), state erosion would be a much slower process than today, in our world, with the Internet and mobile comms.

P.S. Take a look at Terminally Incoherent's work on reinventing fantasy races. It's a fantasy world where the author attempts to remake the archetypal ideas of fantasy in a more creative and vivid way. Some ideas go hand in hand with our perception of the tropes, some give them a new, radical overhaul.