"it is very hard to square the circle whereby coexisting in alliance with the Klingon Empire as we see it is the right and moral thing for the Federation to do."

You have to understand that the Klingons in TOS were a metaphor for the Soviets/Russians and TNG was reflecting the 1980s/1990s hope that democracy was taking root there and by working with them they would be Westernized.

It's also stated in enterprise that Klingons do have other castes, the warrior caste is just the most dominant. (Although the caste system doesn't seem strictly hereditary)