No it's not. Read the actual creature entry. The part about the "spirits of dwarven heroes" is just fluffy flavor text.pawsplay said:But alter form specificies that you take on the physical qualities of the new form. A dwarf ancestor is bodiless.
Many DnD creatures, like some constructs and some undead are animated by extraplanar entities or souls/"spirits". That does make them bodiless or (in itself) invalid targets for shapechanging spells.
And the dwarf ancestor isn't even a construct - it's an outsider, with the physiology of a living creature (need to breathe, vital organs, etc.) . In fact, as I understand the basic DnD cosmology, it is common for outsiders to be the souls of dead mortals taken new form.