Dude, stop using pseudo-science to try and justify not being inclusive, it just makes you look bad.
If elves were portrayed accurately they would not look like humans, but they do, and there's nothing inherently wrong with that, the problem is that they only look like certain types of humans, and there are people who want to identify themselves with their character no matter what race they choose.
This has nothing to do with politics, it's about not excluding people. Ask yourself, what the hell do you lose by letting other people have character options that represent their real life? You lose absolutely nothing except your oh so precious immersion, and to be honest, not even that, it's not like you'll be forced to play as a black woman or something. Trying to prevent other people from having fun with a game when you don't really lose anything by doing it just makes you an asshole.