I have to agree that it's really not clear what the baseline of SF is supposed to be. The assumption that not building many ships is 'normal' doesn't have any canon basis that I can think of. Given the fact that it seems perfectly normal for every govt. to have a significantly sized fleet, and the fact that space is huge, the Federation is huge and Starfleet is significantly more interested in exploration than most other fleets seem to be, it seems a perfectly reasonable interpretation to say that 'normal' levels for SF could still put it as one of the largest fleets in the (known) AQ.
I also have to agree that just assuming we must be on the brink of 'lasting peace' is a very bad assumption. The Dominion was defeated in the AQ, not in the GQ. They still have a huge empire, possibly as big as or bigger than the Federation. The Borg certainly will not have given up their ways, either. And the Voyager's return just brought massive propulsion advances back to the AQ, which means exploration missions in the near future will strike out much farther then they've ever been able to before. The last time exploration made that kind of leap forward (with the discovery of the wormhole) the Federation wound up at war with a massive and technologically superior empire in just a few short years... (Also, canon would seem to suggest that the very first time humans struck out into the Galaxy was so disastrous it led to almost two centuries of hot/cold war with the Klingons.)
I believe The Great Link will overthrow Odo very quickly and be coming back very shortly for round II. I believe they will not accept the female Founder's surrender on grounds that she had gone insane, therefore they will declare it null and void.
Therefore the Feds should keep up war production standards.
Well it was said pretty clearly in the Dominion Occupation of DS9 arc that Odo meant more to the Great Link than the entire Alpha Quadrant.
They said that, but it's fairly obvious they didn't actually mean it. First of all, they had no problem tossing Odo aside by making him a solid.
More importantly, if that were really, truly the case then they easily could have had Odo just by giving up the AQ. If the female changeling had said 'Come back to the Link permanently and we will never set foot in the Alpha Quadrant again.' then Odo would have jumped at the chance to end the war. She never even tried. And she repeatedly alienated him in order to further the war effort. She wanted him, yes, but she wanted the war more. The Link was too paranoid to ever allow anything to get in the way of their 'necessary protection' (read: need to control everything and everyone). Even if that meant never getting Odo back.
Even if the other Founders do not accept the surrender there's not much they could do anymore. They know they can't send more ships through the wormhole and they don't have a war capable force left in the AQ.
I don't see anywhere where it's at all written in stone that they can't send ships through the wormhole anymore. Sisko convinced the Prophets to intervene once, but we have no idea exactly where Sisko is now, and if the Prophets are left to their own devices they almost always tend towards inaction. Sure, the Dominion would be hesitant about it, since they presumably don't know what happened to that fleet, but if they decided to try again, there's no guarantee they would fail.
More importantly - the Federation has major treaties with other Gamma Quadrant peoples and presumably intends to resume their normal exploration efforts, as well. There doesn't have to be any Dominion fleet coming through the wormhole for the Federation to wind up at war with them a second time. It could wind up being Federation fleets fighting in the Gamma Quadrant this time. But with the first war still fresh in the mind, I imagine a lot of Starfleet would still be in that fighting for your life mindset, trapped in bad memories of what happened when the Dominion was able to come through the wormhole, maybe even pushing the escalation of the conflict in the desperate conviction that the Federation *must* maintain a buffer on the other side of the wormhole in order to guarantee that no Dominion fleet will ever reach the AQ again. (After all, Starfleet doesn't really believe in the Prophets, either, so the destruction of the Dominion reinforcements is probably remembered as an inexplicable anomaly that can't be counted on again.)