I think it is a lot easier than it appears at first. You just need magic to obey a couple of central tenets. First: magic can't produce energy out of nothing. If magic requires some kind of finite or limited source of power to draw upon, even if it is as simple as the inherent magical energy of a spell-caster. Second: magic requires a significant amount of labor from trained mages in order to function and be maintained.
The core advantages brought about by the industrial revolution were that it allowed people to draw upon large amounts of cheap energy that gave the further advantage of significantly reducing the amount of labor and manpower required to preform all kinds of jobs. If magic can't replicate that, then it could never be used to emulate the industrial revolution.
For example, lets consider a steam engine powered by magic flame. If the flame is a source of free, infinite energy, then yes, it will be something that could serve as the backbone of an industrial revolution. If the flame works by drawing on the strength of a trained mage, then it would probably be cheaper to hire brute human labor to perform the task than it would be to hire a trained wizard to exhaust himself keeping a flame lit.
The possibilities of a magic-industrial revolution are completely dependent on the basic cost-benefit ratio of magic, which is something that can easily be adjusted to taste.
EDIT: Thinking about, the best way to explain this is in terms of efficiency and cost effectiveness. Sure, magic might be able to facilitate various forms of technology, but the important question is can it do so at a price cheap enough to be worthwhile? The continual light might give light indefinitely, but most people it would be far cheaper to just buy a few decades worth of candles for the same money. If magic is expensive, it would never replace more mundane forms of technology.
I fully agree. We both seem to be arguing for having "scientific cause-effect and energy conservation" laws in place that put the brakes on indiscriminate magic use.
However, "magic-how-she-are-done" in every D&D campaign I've ever played in has been "mage memorises spells and then casts them quickly and effortlessly". Add to this the plethora of natural fire creatures and flying creatures and other animals, plants, races etc that are able to be employed, exploited or otherwise pressed into service towards various ends and industrial revolution is pretty much guaranteed - but blatantly ignored in favour of arbitrary "candle-lit cold damp hovels" and "majestic curtain-walled castles" because "that's what you have in high fantasy, damn it!"
In no game that I've played has the DM ever said, "no, you can't just cast a continuous light spell by saying a couple of words" or set any other form of limiting factor. Magic is as free as speaking to anyone prepared to put in a bit of preparatory learning (to become a mage) and they can wield it with impunity thereafter. As they level up they get better spells but that does not take particularly long in game terms - the game world is apparently teeming with high-level wizards (compared with LoTR's handful) as party after party wanders around killing zombies, vampires and other beasties, becoming immensely powerful in the process.
If a village does not have at least two wizards capable of casting continuous light (and imagine what would have happened in the middle ages if flour mills had safe illumination for night time - they all shut down at dark as it did not take long to learn the dangers of mixing flour and naked flames...) and various other handy spells, then one must assume they are all less adventurous than hobbitses.
And if a neighbouring wizard with those abilities can't see the benefit of casting the spells for them in exchange for a percentage of their increased production from that point on, (s)he's just not thinking clearly.
Flying? Go out, catch a large flying animal, tame it and ride it. Can't do that? Don't worry, there are people who can - and now your mill is running 24 hours a day, you can afford to hire such people.
Flying steeds abound and it was trivial for us to get hold of a flying carpet on one of our raids (and ruin the DM's plan, I might add), fire elementals "draw energy from the elemental plane" and can be trapped and used.
So much wild, unregulated stuff about with none of the checks and balances you describe in your post - unless you, the DM, put them in place (and stamp hard on anyone who says "but the MM says they are very common and easily tamed")
You wind up having to rewrite the lot to make it impossible for a magical industrial revolution to occur and to prevent smart-arsed players from just flying to the top of the tower and snatching the goods.
If you want curtain-walled castles, you have to get rid of pretty much any flying threat - be it dragon or some easily-tamed flying animal large enough to carry an enemy soldier and a bucket of oil. And make any magic that is analogous to gunpowder or greek fire extremely hard to come by.
And then the players will say "Awww, why can't I have fireballs? I wanna throw fireballs at the baddies..." or "the MM says we should be able to find lots of dragons, I want to kill a dragon and keep its hoard."
It's a damned either way situation, really.
In our party we had Drow elves who wore darkened glass discs over their eyes when above ground. Thinking about it now, we could have had a hot-air dirigible propelled by steam if we had been inventive enough.
We could have had perpetually lit palaces, central heating that never goes cold (we retired from adventuring, filthy rich, at 14th level). Our lands could be miracles of the Magical Age with our villagers working day and night (and getting amply paid for it) to produce stuff to sell - we'd be the most powerful people on the continent until other people cottoned on... "hey, wait a minute, we've got powerful mages, too..."
Edit:
Now I feel like going out and joining a local AD&D game just so I can push their world into industrial revolution...