Concerning elves: I must regrettably inform you that trees are not easily DFHackable, at least not with LUA scripts. The species of a particular tree tile is neither readable or writable without going deeper into the internal code, so stuff like growing tree walls is probably not going to happen
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My advice on elvish wood item production: use seeds. Trees have seeds now, and it should be possible to read the wood type directly from the seed type. Remove the default carpenter building, and instead create a special growing workshop that grows seeds directly into items. The 'grown item' tag can be added using DFHack.
Production using this method would be slow, but could be made up for by other benefits, like the ability to magically alter seeds to produce enhanced seed types, like ironwood/steeloak/something even stronger?. Forcing elves to wait for trees to produce fruit in order to produce items would be challenging to players accustomed to dwarven production methods, but it would be a unique playstyle, and a very elfy one indeed.
The new trees are affected by time acceleration, and giving elves the ability to speed up time is fairly elfy as well. This could make the seasonal workshop idea be more interesting as well.
They could also have a copy of the gnomish druidic system, although I don't think they should be able to armor animals.
I don't think elves should be able to produce mithril. They couldn't produce it in LOTR, which is where the source of the elf-mithril association comes from - they had to get it from the dwarves, so elvish-enchanted mithril (like starmoon) was used as a sign of peace between the two races. Following this, they should be able to enchant it if they do manage to purchase some from a dwarven caravan.
So basically, elf ideas are:
Above-ground gameplay, even more than humans (possibly sickness when staying underground for too long, and/or no access to picks at all)
Production of wood items from seeds
No metalworking (or only basic metalworking), but able to magically enhance seeds to produce better wood
Can't produce mithril themselves, but can do interesting things with it if they manage to get their hands on some
Seasonal magic (since weaponizing and armoring your troops will be slow and tunneling is a problem, they should have some magic method of fighting or driving off enemies instead. DFHack can do some cool things here.)
Druidic animal taming and training, but no animal armoring
Speeding up time
Possibly some gem-based magic as well (based on the Silmarils)