You're looking at those little piss-ant Florida trees in their so-called forests that suffer from inadequate soil and inadequate fresh water and getting blown over or were clear cut within the last 10-20-50 years, or were burned back. You've got a lot of 'forest' planted and planned for eventual lumber production, so you have a lot of pine trees and other 'useful' trees that grow tall and straight with little in the way of limbs. You know why? They were planted that way for eventual harvest, and they're easier to use for furniture production.
Most of the areas you might think of as 'wild forest', isn't. Someone owns and maintains that woodland. In most places in the US you're really looking at managed cultivated forest that exists solely for timber production. You look at true old growth forests and there is more than enough 'tree' there to support a city of massive tree houses.
I don't see elves as needing the amounts of wasteful space we do, either. A 2000-square-foot house to them would be like a mansion. I see them as very efficient users of their space; everything will have four or fives uses and they'll produce very little waste. They are typically expert craftsmen; they take a month to build a chair and that chair is going to last a 200-300 years. What waste they do produce will go into the tree, or for fodder for the compost.
Part of this outlook comes from the fact that D&D does a really poor job of mentioning how magic aids daily life; it's all about killing monsters or saving your own butt. Fine and dandy most of the time, but you're overlooking a lot of the implied Elven magics that help them survive.
Elven communities are typically not very big. They will plant crops, but not as we plant crops; they'll plant in plots, not rows. In an old growth forest, there's plenty of room on thr ground. There's not much undergrowth at all because the tree canopy so you can grow an abundance of things that do well in shade.
It's much more labor intensive but elves have an abundance of time. Planting in plots creates larger and healthier yeilds, especially since things like pixies, gorse, and other small faires are going to help them by being able to keep vermin and insects to a minimum.
In fact, elven crops are probably much healthier and thus create much larger yeilds than comparable human crops do because of their various means of insect control. Farming in the middle ages is a hugely time consuming effort that really yeilds very little. Insects ruin a tremendous amount of human produce, something like 20-25%.
Add that to the idea that elves know what works best when fertilizing soil, and an elven community is likely to do better than a comprable human community of the same size. They'll probably export to the human communities bordering the forest, especially in winter.
Also, elves don't need titanic agrarian fields of wheat and corn like large human settlements do. Why? They don't usually raise food animals or use beasts of burden or a great deal of riding animals. From what I remember, a huge percentage of that wheat and corn in a human famr goes to feed animals, not people. If elves want meat, they hunt it. Otherwise, fruits, nuts, eggs, root veggies, green veggies, and lots of mushrooms. They also probably know means of rendering edible many plants that are not normally edible by humanoids. It's also likely that their culture will eat things your Northern European doesn't consider food, like grubs, worms, many types of beetles, etc. All of it rich in protien and other nutrients.
Now, all this is without magic. With magic, they're going to be producing bumper crops of forest-based fodder.
