Greetings!
Hey my friends! It's good to see you all again as well!
Well, in thinking about some of the issues brought up--for example:
(1) Elven Military Superiority
The elves' long lifespans--either in hundreds of years, thousands of years, or immortal would naturally translate into greater skill. Indeed, exceptional humans would be potent, but while considerations of "game balance"--vis-a-vis the *player characters* may be a significant consideration, I think that simply using logic would dictate that your average elven army--in contrast to the rule-campaign "assumptions" of every race--including elves--would have troops at 1st or 2nd level I think is nonsense. I think most elves would be somewhere between 6th and 12th level, minimum. If you think about it carefully, that really does solve all of the thorny "mechanical" problems, such as, how are elves more *skilled*? Well, at higher level, each elven soldier would have more skill points, as well as higher stats, translating into a simple way that your average elven warrior would literally be the equivalent of a dozen or more normal humans. Again, if you consider the lifespans, and the lack of elven numbers, this would also dovetail nicely for why a few hundred or a few thousand elves manage to keep much larger enemy armies not only at bay for hundreds and hundreds of years, but also periodically routing them entirely.
Treasure and equipment wise--as per the rules--this would also explain why and how the elves have all of these super magical goodies that just seem to be everywhere--because from a human standpoint, it is a fact, that your average elven knight *is* majestically equipped, with much finer *everything* when compared to humans. This neat aspect also allows the elves' superior crafting skills, magic, and wealth to come into play as well, in a neat, smooth way.
(2) Elven Magical Superiority (Arcane: Wizards)
Somewhat related to (1) above, the elven wizards would be higher level, and therefore have more skill, more wealth, and more spells, than average human wizards. Elves's superior INT allows them more skills, and just the fact that they live longer, means they have more levels, and have learned *more skills* Thus, the elves' will have higher skill ranks in any number of crafting skills, knowledge skills, and so on--all quite impressive to your typical human, wizard or not. It's the elephant in the room, but every DM has to tackle the challenge--does all those extra years of life mean something, or not? It seems to me that merely assuming it is some kind of *cosmetic* difference, and willfully ignoring that salient difference so that other "players"--of whatever race or class don't have fits--really does a disservice to the elves as a race and mythical archetype. To ignore this salient feature reduces elves to being "humans with pointy ears."
(3) Elven Divine Superiority (Divine: Druids and Clerics)
The elves, being more attuned to nature, and having a huge amount of animal, elemental, and Fey allies, can always fight in terrain and weather of their choosing, because they really only have two considerations;
(1) What environment aids and maximizes our elemental/natural/fey allies to the best effect?
(2) What environment and weather right now will hinder the invading human army the *most*?
The fact that the elves can always tailor these things to a significant degree, also means that the humans are always suffering an enormous casualty rate, as well as struggles and problems with operations, from horses drowning or sliding in mud, to human food supplies becoming rotten with mold, insects, water, or heat.
Also, the elves can use massive alliances with such creatures to increase their own fighting forces in powerful ways. How many regiments of human troops are a half dozen earth elementals worth? How about a regiment of fey working through the human encampments day after day, night after night, ripping things, sabotaging things, spreading disease, death, and madness at every turn? How many platoons of human cavalry are worth a dozen treants, or storm giants? Let alone the distinct possibility that an elven kingdom would have alliances or even breeding programs for families of good dragons. That thought alone would make most human armies begin to seriously consider rebellion at the thought--surely they would know--"Yes, yes, mi'lord....we may be able to bring down those three Silver Dragons...but...but...who will go first? How many regiments of troops are for sure going to die in agony by the bushel before we are able to bring the dragons down?" The commanders know this--and so do the rank and file troops, facing the dragons from afar...or wondering...waiting....when the dragons will strike. Add in companies of elven wizards or rangers flying on pegasi, or riding about on unicorns, and the proposition of conquering an elven kingdom becomes a daunting prospect indeed.
Semper Fidelis,
SHARK