Internally it's possible to set up all sorts of different DNS record types (CNAME, MX, etc.) with dnsmasq and even UCI, but not via the LuCI web interfaces.
It strikes me that the rather barebones "Network > Hostnames" page would have made a reasonable place to extend, since it's interface is very sparse and might be a nice place to support full custom DNS records instead of just simple hostnames. But I see that I might be a bit too late to this, as that formerly-independent page has been merged as just a tab within the DNS/DHCP one: https://github.com/openwrt/luci/commit/96ef7beb66de322411ad9a784953d7ff5a0ddfc1#diff-6f0eaa1a5cec77dd1b09279d14093e0caba6bde0926a52629b75cbf60b5b0d9c
Is there any interest in squeezing more functionality into the Hostnames UI wherever it may live, or does it need to remain simple in its new home? It'd be nice to be able to add local entries for all supported DNS record types (instead of only what I guess amounts to A/AAAA records) via LuCI.