I think LotR was the first to have elves and hobbits and dwarves and orcs in the way that's instantly recognizable.

And I would argue that counts for less than you think. One of the things I like about modern fantasy is the trope that Elves are assholes. Tolkien was basically at "look how cool this lost race of ubermensch are" while modern fantasy is basically "elves love the smell of their own farts."

I agree that its a cozy story, and 1000% caste system, though imo LotR is a lot more thoughtful and I'd argue that the whole 'magic is fading and evil will eventually win but we'll fight while we can' tone makes it not all twee feel-good fluff.

On the one hand, it's a bunch of children's books. On the other hand, it very clearly reflects Tolkien's understanding and trauma of The Great War. I think it's the duality that bugs me; by trying to be both it does neither well.

The thing about American fantasy of the era is the good guys and the bad guys were human. You couldn't hide your actions behind ethnic tension. America fought a war over slavery; the British didn't think it was worth fighting a war over genocide until it was on their doorstep.