Home base for the campaign is Dover village, with neighboring local elf and goblin populations as well and outsiders can come from most any race.
Races that do not have common as their primary language do not speak common as a free language
no half races: Half elves and half orcs are distinct elf and orc subraces with the core half race mechanics. Many monster and race book supplements allowed (I don‘t have Savage Species or any
WotC Races of Books though). Half templates exist but do not come about through hybridization. Races are essentially species.
LA +1 to +4 OK but see above.
Good Doggy: Dover traits are from Complete Minons, medium humanoid (canine) +2 dex, +2 wis, -2 int, scent, bite 1d6 natural weapon, +4 listen racial bonus, two weapon fighting bonus feat, speak canine, +1 LA
Little Birdy: Vogels are size small.
Many non-PH sources including lots of monster books are OK. Ask if interested.
Race Books: see below under Sources