You should also think simple as well as complex and magical. There are simple things the elves could do, especially with enough time, without the use of magic, that could be impressive to your players and give a feeling of a pratical civilisation as well as a magical one.
For instance,
IIRC redwoods are actually hollow. It would be relativly simple to press a small arch against the trunk of a redwood, and eventually that arch would lead into the tree as the trunk grew out and over it.
Another example would be construction that doesn't just rest on tree-tops, but relies on the growth of trees to create or as part of their assembly process.
Imagine if the elves need a watch tower. Well, they could build on in a big tree, or build one on the ground and then haul it into a tree. OR, they could build it in several parts, each one in the branches of a young tree near the ground. Over the centuries, the saplings would grow up and the pieces of the watch-tower would naturally come together, maybe with the help of some guide-ropes tied between them. Of course this would take a while, but it would probably be the best view ever.
Another idea in this vein would be modular buildings. Say there's a hall built along a large branch of a tree. The hall is built of segments, modular pieces made of a roof and two walls. Each one fits into place against the next piece. But how did they all get there?
It started off as only one segment, resting against the tree trunk, but as the branch grew longer and wider, the earlier segments were pushed up and out along the branch, and newer, larger segments were lowered into place, against the trunk of the tree. The result is a tapering structure which has extended along with the branch as it grows.