Pavalini wrote:
Tolkien, with his "The Lord of the Rings" trilogy, brought back the old face of the timeless pagan spirit and gave them a culture. The Elves in Tolkien's books had a Utopian society and a blank crime record. As true to their roots, the Elves were a god-like, nomadic race. This is why I do not use Elves: such divine perfection has no place in any novel of any kind. How can the protagonist go through the story without admiring and mimicking the Elves, because it's so clear their methods work best above all others? Where is there room for development? Would not all government, kings, and peoples in any "believable" story involving Elves throw down their customs and adopt the more divine ways of the Elf? Would that not be the realistic approach? It would take little to realize that, with every kingdom a Utopia, there would be no reason for war, as power would be completely realized. Tolkien pulled it off, but I'm no Tolkien.
I'm afraid your seriously mistaken about Tolkien's elves. They are, if anything, more like real humanity than his humans are.
1: Elves are just cultured fairies.
As with wizards, balking at Tolkien's choice of names is, to be blunt, a bit silly. Tolkien uses terms like wizards and elves not because they represent the races well, but because they are familiar. "Wizard" made the reader of the time think of possessors of mysterious power. But objectively speaking, Tolkien's "Wizards" don't use magic, but inherent power given to them by Iluvatar.
The same is true of the elves. The term makes of think of the physical attributes: fair, light, pointy ears, the way they move, etc. It does not refer to the pagan roots but was chosen to evoke an image. The elves are just the face of the fairies, not the descendants.
2. Utopian Society and Crimeless History
Doubly wrong. The elves have a history absolute full of trouble that they caused. In fact, most of the trouble in LoTR was caused by elves of the past.
In the Silmarillion (which you don't appear to have read, or at least don't remember) a single elf (with some outside interference from Melkor) successfully curses most of elvendom to die away from their homes, at the mercy of the Dark Enemy. His folly also dooms subsequent generations of men and elves who will die for his foolish decisions.
And, this one elf isn't the only one. From this point on, Elvish history is full of lies, treason, and death, all originating from his mistakes. Interestingly enough, he offers an interesting parallel to Adam, just as the true villain, Melkor, offers a parallel to Satan.
3. God-Like Nomads
First, the nomadic part is technically true. The elves left their first home at the bidding of the Valar, and most of them were later banished from their second-and better-home for crimes of murder. The nearly complete slaughter of an entire group of elves (something like a thousand).
As for the God-Like thing, it should be noted that the elves are less god-like than the men. While men are given freedom to shape their lives (within Iluvatar's will), the elves live out a story that was written for them thousands of years before they came into existence. The elves are completely bound to this story, and are also notably trapped inside space-time, unable to escape to a spiritual existence. (This raises a question about the fate of elves at the end of the world, something Tolkien mentions but doesn't clear up.)
The only reason Tolkien was able to pull it off was a back ground history that LoTR readers are largely unaware of. What appears to be a Utopian society on the outside is really a very human race on the inside.
To put it simply, the humans do better than the elves throughout Tolkien's histories.
And finally, the elves are mortal, just in their own way. Any elf can die, just not of age, or normal sickness. Elves die of weariness, poison, wounds, drowning, hanging, etc. 
Finally, I should note that the only problem with Zeus or Thor is that they are offered as alternatives to God. Would you object if they were portrayed as subservient to the One True God, Yahwey?