And trees should also give firewood when they're cut instead of just logs, and the quarries should provide a lot of gravel for an intermediate type of gravel-roads and and and...
Basically, can't expect 100% realism from the game.

If Sheep produced wool and meat and leather, they'd be a bit overpowered and no one would want to get any other kind of animal except for the sake of variety ;)

The skin of lambs was the original parchment. The illuminated manuscripts were made from them. It went through a careful process to render it the fine writing surface it was to become. this might be worth looking into, as I've heard there is a library mod. It would go with a medieval theme. All medieval books were written in lambskin parchment until paper was rediscovered.

As for the meat of sheep, I don't know of anyone elses' experience but it is quite gamey. There are glands on the legs of deer, wild sheep and other animals that must be carefull skinned around or they taint the meat with a foul and gamey flavor that cannot be removed. This is why mint sauce is served with it. Probably not your best cut of 'meat'. Not an expert, just tellin' what I know.

So, no. Mutton would not usually be your first choice of every day meat, unless you were really good at preparing it. Trees do not give uniform bundles of nicely graduated firewood. Sorry, it just does not happen. As for gravel roads (I endorse no mods - do your own research) there is at least one mod that does this. Haven't used it myself, so I have no idea if it is any good.