I read the Eddas and the Sagas in the original language. Together, stories and comments here and there flesh out a reasonably comprehensive view of what an Alfr is.
An Alfr personifies success, so even other races rely on them for successful outcomes. The Alfr is known for superhuman beauty - which is notably masculine - unlike the beauty of the Greek Nymph which is notably feminine. The Alfr is superlative in magical powers - including charm and mental magic (Seiðr), intuitive sensing and foresight (Spá), healing and protective magic (Galdr), creation of magic items and technologies, summoning otherworldly spirits, weather magic, and so on. They are known for beauty both in physical appearance but also in mental beauty, such as beautiful speech - both in the sense of a beautiful voice and in the sense of appealing word choice and pursuasive logic. They personify accurate advice. They materialize and dematerialize into spirit/wind at will. And so on. They personify cosmic order, winning, skill, luck, fate, destiny, prestige, fame, glamor - success.
They are celestial beings who live in the sky, and literally glow daylight, somewhat analogous to mideastern angels, and the terms are often used in similar abstract contexts - such as calling certain people an angel in the sense of a wondrously charming person, or an ‘angel of battle’ in the sense of personifying such ‘lucky’, fateful, skillful, magical, successful outcomes. Likewise, biblical angels are known for masculine beauty.
That's all fine, but what does that have to do with an elf in D&D?
Don't get me wrong, that's a fine approach to take as a dm; what I take issue with is your continuing assessment of your approach as objectively correct. It's not. It may work fine for you and for your players (and for many others), but let's face it- legend and myth never bother balancing nonhuman races against human races. Neither do books or tv shows. They aren't D&D, and whatever version of elf you like (be it Tolkien, Norse, or whatever) is NOT a version suitable for the game at large. Try to shoehorn it in, and you have the 2e Complete Book of Elves.
Yet I disagree the game must force players to avoid Nonhuman races. For example, I care about mythological accuracy. When I play an Elf, my character concept is a mythologically accurate one - where Charisma and Intelligence are the most salient tropes. The Elf (Alfr) personifies success, superhuman beauty, innate magic, charm, persuasiveness, luck, prestige, fertility, wealth - success in every way. Charisma is essential. Intelligence in the sense of skill, logic, technology, memorization, and so forth is also vital. Also Wisdom is important in the sense of intuition and foresight. On the other hand, Dexterity is irrelevant. The point is, I should be able to play an archetype that I find fun and interesting. The game needs to be as flexible as possible. It shouldnt force me to play a Human in order to explore an Elf archetype.
First, I've never argued against nonhuman pcs. I'm arguing that if you want to play an elf, you have to play that elf by the rules. Specifically, in regards to your +1, +1, -1 scheme, I'm calling it out as a bad idea for a rule, both in terms of mechanics and in terms of verisimilitude. (I know, there's that word...)
So, about your elf- What if that isn't the type of elf that exists in the dm's game? Do you still insist on being able to play your type of elf? Certainly, that doesn't match up with the description of elves in 4e (or really in any D&D stuff, given your dismissal of Dex), nor does it lend itself to game balance.
I absolutely and categorically disagree that referring to mythology is a good way to ensure the game stays balanced. I absolutely and categorically disagree that the game MUST cater to every taste of every player in every way. Would you also argue that you should be able to play a heavily-armored, sword-wielding wizard? The no-armor, crap-weapons trope is a pure D&D thing; there are plenty of mythological counterexamples. Yet the player who makes this pitch to me is going to have to wrap his concept up in the system, rather than expecting the system to change to accommodate him.
And you haven't even addressed the balance issue (+1/-1 vs. +2/-2), except to handwave it away. That's a recipe for giving freebies to the player, which I straight up DO NOT do. I don't give pcs bonus feats for fun, I don't give them a magical +2 to hit just because, and I don't give out free stat bonuses- which is the main problem with adding odd numbers to stats in 3e and later D&D, as has been repeatedly addressed by the designers themselves.
I mentioned upthread that I am not a coddler. I don't pull punches in combat, I almost never fudge the dice (for or against the pcs), and I don't rearrange the milieu to insert new major cities, organizations, races, etc because someone likes the notion of them. I don't care what view you hoid, as a player, of gnomes; they have a specific nature and culture in my campaign, and no matter how much you love the idea, you don't get to play a tinker gnome. They don't exist just because you want them to; stuff in the world is stuff in the world, and you get to play with and among it. The campaign setting, to me, trumps any player's (or players') neat ideas about shoehorning whatever into it; I simply don't do that. At least not on the scale we're talking about. (It's an entirely different thing to take a pc's background elements that do fit in the world and run with them; if a pc wants to be an elf of the sort in the campaign world and wants to add, say, a noble house or trade route in an area not fully fleshed out, sure, that's fine. But wholesale rewritings of a race just to accommodate a pc's concept? I think not.)