First things first, remember that the 'Fifth World' was a LOW magic zone, not a NO magic zone. Basically, picture a Mana Ebb at -10 or so, practically (but not quite) to the point of being a Void. For the vast majority of creatures on the planet, this is functionally a magicless era, but for a very powerful mages and spirits, it is still there. They're weakened, of course, but still able to do some things. Hence why dragons (which are dual-natured) merely went to sleep instead of dying when the mana dropped. So yes, the immortal elves were always elves. However, a minor glamour to hide their ears would still be possible for them, and there are all those mundane means of disguising themselves.