Yes it can take more damage. See the "damage" parameter in base/ufos/aircraftmanagement.ufo.
Do not build the dragon. Soon after you have it, gunboats will start to appear, which are faster than dragons so they cannot flee from it. Go one step up to build starchaser, which is fast enough to flee from every UFO and which should be safe to attack every UFO with on full equipment except probably bombers. Also, do not defend any base that has sufficient soldiers and equipment with interceptors already. Base defenses are easy due to the cameras. They also yield a good amount of battle field loot to sell and an undamaged large UFO.
