I also recall the quote, but I think the squirrel went from
the Old forest to
Dunland, not
Fangorn... Yes, they are close, and it probably does not matter. I don't think Fangorn and this big primal forest were connected, however.
Rohan is a somewhat drier country (to account for the prairies and grass as opposed to forests). Why is it so? I don't know how "ecologically accurate" is
middle-earth, but in our planet, these "drier areas" are a result of the wind patterns, which in turn are a result of a) position on the globe (deserts and savannas are usually close to the tropics, while the Equator is heavily forested) and b) the effect of
mountains (the Death Valley, for instance, is "in the shade" of the Rockies and do not get the rain that comes from the Pacific).
This may all be useless in the fantasy world of ME, but if it is not, I would think that that spot between the two big chains (Misty and White) would not sustain a forest. The rains would go over it without actually falling, and the
rivers of the area do not drain large basins. Perhaps a wooded savanna?
I always wonder about the huge deforestation provoked by the
Númenóreans in
Eriador, and the effects it had on the climate of the area. It should be warmer (the shores of Eriador are close to what was
Taur-nu-Fuin, which was described as similar to a tropical forest -- tangled and full of different
creatures).