The Swedish game Eon had an interesting take on this. Regarding crafting, the very best an elf can do is generally better than the very best a dwarf can do. The thing is that the elf is spending like a decade on making that thing, while the dwarf is spending a month or so.Yeah, the worst book in all of 2nd Edition, in my oh so humble opinion, was the Complete Elven Supremacist's Handbook, where were learned that elves do everything better than everyone else (think dwarves are the quintessential crafters? HELL NO, elves are even better!).
This means that elven fighting forces has a small number of people using uber-swords and light armor and the rest using staves and clubs (essentially being skirmishers), while dwarves all use metal-hafted pretty-good axes, heavy shields, and reinforced mail armor.