WooHooMan
Auror
The Norse mythology version of elves and dwarves has always been interesting. Definitely gives a different perspective compared to the Tolkien interpretation.
And then there's differences between the Tolkien elves and the D&D elves. Or pop culture elves like Christmas elves or Keebler elves.
It's like history has proven that elves are pretty flexible.
I like elves, if I'm honest. And dwarves, etc. I just don't like carbon copies of Tolkien elves. And the whole 'fading away' thing also bugs me to no end. I guess because I'm not a fan of stories where the magic 'goes away'. I want the wonder to grow, dangit!
blah blah blah
It was either that or make them eldritch world travelers that sailed the sea between worlds. Kinda like cthulhu mythos, only prettier. And most of them aren't even interested in humans. But there's always the occasional one (considered a pervert and shunned by the others) that do take interest and eventually interbreed with humans, producing what is considered in-universe as an elf (pointy ears and all).
There isn't really anything about this post that I don't like. I also really don't like the "magic fading" cliche.
My elves are really similar to what you described with the Cthulhu elves. I'd recommend going with them. It's a neat take that works weirdly well.