I know this might be a controversial opinion, but I actually think dwarves have more options than the lizardmen for a competitive build. The book actually has decent internal balance, and while your traditional "gunline" is still effective, so are other builds. They are still slow and blocky, but there is incentive to charge and in turns 3,4,5 you'll actually be fighting combats, which is something competitive lizardmen lists rarely do. Their core is actually extremely good and well costed. War machines play a pretty significant role in any dwarf army, but the new book is surprisingly mobile (for a dwarf list) and offers far more variety than the last. I think GW actually did a fantastic job turning a rubbish, boring to play and play against army into something fairly dynamic while still maintaining it's flavor. However, even with that said dwarves still are never going to have a magic phase, and their obvious lack of monsters is a problem the lizardmen don't have. And if we're talking about overall options (not merely competitive ones) the lizardmen certainly have more variety. Monsters, combat troops, skirmishing chaff troops, choppy lords, magic, shooting, flying. Lizardmen have a decent range of options, it just boils down to many of them being extremely subpar in any type of competitive type atmosphere.
I have played Dwarfs a couple of times. They are even slower than Lizardmen, and only the Gyrocopter/Bomber gives them a fast moving unit. That can usually be taken care of by our skirmishers or flying units. Playing against the Dwarfs is kind of boring the first 2-3 turns of a game. They try shooting your units as you move across the battlefield. The Dwarf player I played against just bunkers in a corner or the battlefield and waits for you to get to his troops. That does not seem like a lot of fun to me. Even with the different Dwarf war machines and infantry units, it is a very static army. In one game he did start to move one of his infantry units across the battlefield and they were slower than our Saurus. I think he was getting bored of just shooting and wanted to get into CC. I much prefer the options we have as Lizardmen to make different types of army builds with a combination of slow units, fast units, and monsters!
Currently the best dwarf builds combine infantry blocks with war machine shooting. You're in combat on turn 3 ish after loosening things up with the cannons. Castleing is still possible but is generally seen as a "last book" tactic and is no longer the only option dwarves are pigeonholed into. I still think lizardmen have more overall options, but still less competitive ones. How that ultimately ends up affecting the way you construct your army is going to depend a lot on personal taste, a lot on your meta, and a lot on how you want to play the game.
One thing to consider (understanding you want a magic oriented buff/damage oriented army (to play with friends/local groups)) is that Lizardmen can definitely provide this experience. I have never been involved in a larger tournament, but I do have a group of 8 people or so that get together for a Warhammer game once or twice a week. I have a HE army, O&G, and Lizardmen armies. HE can definitely do what you are looking for, but I agree with you: The models are not as cool. Lizardmen can also do this for you. Our core consists of two types of units essentially: Skinks and Saurus. One is fast and shooty, one is slow an fighty. The only problem though is that the Saurus are a bit too slow and have WS 3. Now if you are wanting to play a buff oriented army, you have two options for helping out Saurus warriors (skinks do not need help!). One is using Skink Priests for Beast magic. Getting Wyssan's off will turn your Saurus (or temple guard) in to burly S5 T5 body builders. They may not be able to hit much, but boy they become a lot more respectable. The second method (which I personally use to great effect) is to run a Slann with Light Magic. In my opinion Speed of Light (or even time warp! OR BOTH!!!!) is the single most powerful spell that can be cast on a unit in our army. WS 10 I 10 Saurus? Yes please. They will hit, they will generate more attacks with PF, and they have two attacks each (3 with timewarp). Or how about WS10 I10 ripperdactlyls? Generally my opponent knows they are going to be losing a unit when that scenario happens. Obviously the Slann is not the best wizard. But magic phase is magic phase, and its usually so random that how good a wizard is can be summed up by how much they can mitigate this. The slann can some, so that is good enough for me. If you want to sink an unrecommended amount of points into magic, you can pick up a toad AND tetto for the reroll to ones and pray the duo can carry your army. I have been playing WFB for about two years now. I started my first army by figuring out which models looked the most BA and therefore would be the funnest to paint and put down on the table. Followed that up with some reading and decided they were for me. I will reiterate: I have HE and Lizards. I think my lizards see about twice as much play as my elves though. The mechanics and durability of the army makes me choose them most of the time. Sure they have problems. I try to patch those problems with my magic phase with buffing. I struggle Vs. empire and Witch Elf death stars. I tend to win vs. the local dwarf, beastmen, bret, and WoC players. Our wood elf player runs a build similiar to what you described, and we generally end our games in a draw. Anyhow, I hope you pick Lizards. Cheers!