I think the best elves and dwarves come from the old world of darkness in "dark ages: fae", where they had many varied appearances, but every one of them could be easily distinguished from humans at a glance, you could easily tell that this was anther species entirely, humanoid, but obviously inhuman.
There was this "features" system, you see, and your faerie would have a "faerie mark" that would distinguish them as something not of this world, features could be anything, it was basically a "build your own alien" system.
The features would also have gameplay effects, to them, like how having a tail could allow you to use it like an additional limb, you could tip it with a spike for use as a weapon.
Or how being a giant would incur the bonuses and penalties that come with having prodigious size.
Basically, "features" would grant you free powers and.or weaknesses, and as your faerie got more powerful, they could take on more of them, which also would grant them more vulnerabilities, moreover, the more powerful your faerie got, the more vulnerable they were to the universal weaknesses of their kind, like being cut with or pierced by iron.
I liked the magic system as well, it basically worked a lot like "dark ages: mage" except the faeries were a lot more powerful, but in a lot of ways their magic was essentially another "mage" pillar, similar to the "old faith" faction.
They came in three main kinds:
firstborn - who are the true fae, and tend to have more power, but also more vulnerabilities.
changelings - who are a mix between humans and faeries, and at thus more able to interact with humans, since they get a free "mein" to use to mask themselves as humans.
inanimae- who are faerie spirits who got imbued into something that was formerly inanimate, thus they can hide away in their "husk" and sleep in it to recover themselves, also they are pretty much immortal unless their husk is destroyed (but you can die by accident, like if your tree gets chopped or your rock gets split, or your fire gets put out, or your water gets drunk).