Sadly the elf army list is rubbish, if you want to win you first have to accept that you can,t really have a theme a High elf, Galadhrim, or Mirkwood army won't work you have to cherry pick the best bits of each of these and combine them.
Loads of people have asked these questions before (mostly me) i'll post some links to the article
A list of good allies that provide some hitting power
viewtopic.php?f=88&t=23091a list of tactics and I suppose skills elves have that are overlooked
viewtopic.php?f=88&t=23120Lastly you will need a spell caster so here is a really really brief summary of the spellcasters you can use
I'll split them into four different types Support, Destruction, Warrior Mage and Augmentation
First is the Stormcaller who is just the only good equivalent of a Shaman he has no other abilities so doesn't really fit into any category he has Mastery 1 Wilderness he has some use in a unit of archers Guide Arrows (+1 shoot value) or another fragile unit you want to keep out of combat Call Wind(Drive Back D3+1 or as I call it just out of charge range), Entangle(Move as if difficult terrain) and Panic Beast(Courage test or Driven back D6+6) are good at keeping enemies away also Nature's Wrath (D6+3 hits and is stronger if in terrain) is also good but for 100 points he is just to overpriced to be used / especially for allies as you have to take another elf unit with him, my advice STAY AWAY
SUPPORT
Loads of great heroes are best used supporting others and include Galadriel, Elrond, Gandalf, Cirdan, Arwen, Gandalf both White and Grey and Radagast
Galadriel and Gandalf: I'm putting these two together as they share loads of abilities and are a similar price they share Epic Renewal (a hero regains a point used up earlier in the game), Counsellor (at the start of the turn you can give 1 or more might to another hero, roll D6 and if it's a six the hero gets 3 might instead of 1), Epic Defence (increase a formations defence by +2) and Touched by Destiny (one free Epic action each turn, amazing for Epic Defence, Renewal and Channelling) and Epic Channelling (allow you to re-roll focus rolls). There mastery level of 3 in Dismay and Command mean they can reduce enemies courage, increase your units courage, Immobilise/Transfix key formations, heal lost units and make his unit cause terror which can all be used together to devastating effect and can give your entire army a significant boost.
Gandalf cost 25 points more and has the Blinding Light spell which allows him to reduce a formations fight skill to 0 for a turn and drive them back D6, which is easily worth the points but Galadriel causes Terror so it is personal choice over Terror for free or Binding Light for around the cost of a company.
Gandalf's white version just improves these abilities Overlord (Formations even without a hero can use his might to call any heroic action), Terror (unit is harder to charge/better at charging especially when aided by his spells) and Voice of Command (+1 courage to all formation within 6 inches of his formation) but at 300 points he becomes to expensive for most armies.
Elrond: Elrond is a strange Epic in that he doesn't fit into any role very well, with fight 8, resilience 3, 3 might and inspiring leader (Elves) he could easily have been a warrior Mage but then he was given Epic Renewal (a friendly hero regains 1 point of might) and Restoration (a formation regains D3 causalities) which do very little to help him in doing this. On the other hand with these and mastery 3 in wilderness and command he could have made a good support Epic but he lacks Touched by Destiny (one free epic action), Mighty Hero (regains used might on a +4) or Hero of Legend (1 free might per turn) so he becomes very poor as his might will run out quickly and there are much better and cheaper spell caster who can do the same if your looking for just a pure support caster. For 215 points he is way to much to be a jack of all trades but master if none.
Cirdan: a budget caster with budget abilities. I like Cirdan at only 75 points he is easy to fit into most armies and I have found that he is often overlooked by your opposition and is left to his own devices. With Mastery 1 Command he's not the greatest spell caster but often he still has access to a couple of courage improving and draining spells and my personal favourite spell Blessing of the Valar (regain D3 or D6 causalities) this spell alone is worth you taking him alone because this is he excels both Epic Defence (+2 defence) and foresight (for every causality on the roll of a 6 it is stopped) allow him to toughen up units meaning they take less damage add this to the ability to replenish lost troops and a unit suddenly has an unexpected amount of resistance. I accept that he may only have 1 might but a counsellor such as Galadriel and Gandalf can keep him going. I find it is best to but him with a hero such as Aragorn or Boromir who will get all of the attention and allow Cirdan to do his thing without anyone noticing.
Arwen: Basically an improved Stormcaller and a caster on a budget (125 points) . She has Mastery 2 Wilderness making her a competent caster and with 3 might, Epic Defence and Natures Wrath (a wilderness spell that is particularly useful against units in cover) she can easily be worth her points in most games and is more versatile than a Stormcaller and is a good choice for an ally given the high cost of other casters. If your ever tempted to take a Stormcaller and you already have Thranduil take her instead.
Radagast: At only 160 points he is the cheapest Mastery 3 caster on the good side and evil I think if you take away the massively under costed Ringwraiths. He is very good at support but is let down by not having Touched by Destiny or Counsellor. With Epic Defence and Renewal he can keep a unit going but his real skill lies in Epic Tranquillity, Beastwalk and Birdsight. Epic Tranquillity a unique ability allows him to stop any unit charging his formation that turn this is an absolutely incredible ability that should never be overlooked. Beastwalk means any unit he is in has pathfinder (Master) and an increased charge range this ability is often overlooked and your opposition often forgets he has it as they get hung up on Epic Tranquillity meaning you can can get one or two of those all important flank charges in when they're least expecting it (I can vouch for the amazed look on the other guys face when you roll badly and he celebrates for a bit until you remind him you charge D6+6 not D6+2) you'll be surprised how often those extra 4 inches make all the difference. Birdsight is again massively helpful being able to cast spells without a line of sight is invaluable as it allows him to help units that would usually be isolated e.g those that were left behind to protect archers/artillery immobilising an ambushing or instilling courage so your troops don't become disordered after failing the courage test to be charged by a terror causing creature can make a huge difference. Lastly he is the only mastery 3 caster with wilderness and command which can give him an edge over casters such as Gandalf and Galadriel as Dismay and Command are very similar spell lists which is good if you want to double up (Sunder Spirit and light of the Valar which both drop courage or Immobile and Transfix which both stop formations moving) but the variety given by Wilderness does provide you with a few more tactical options.
For the greatest support caster I would have to go for Gandalf the Grey. Galadriel comes a close second but Blinding Light is to good and Gandalf spells allow him to cause Terror if he needs to, also he has 1 more reliance which makes him just a little bit harder to kill which is nice as he cost 200 points.
DESTRUCTION
There aren't many of these for the good side but those that are are able to cause huge amounts of damage that no other caster can match and include Saruman and the Council of Wizardry
Saruman: Though Saruman does have some supportive Skills, Voice of Saruman (stops a charge against him if you roll 1-3 on D6), Epic Renewal and some of the spells in Command and Dismay but this is not the reason why you would take Saruman. You take Saruman for the spells of Ruin he is one of only two units in the entire good side that have it, He really excels at causing massive damage where other good spell casters can't Epic Ruination (+2 strength to all Ruin spells) and the Ruin spells allow him to cause D6 strength 1 hits per company (amazing with Epic Ruination against large low defence units), re-roll 1s and 2s in close combat (all hits if you roll a 6), D6+3 strength 5 hits (amazing against small high defence units with Epic Ruination) and Shatter Shields (removes shields for a turn, or the entire game if you role a 6 which make that group of Morannon Orcs or Easterlings look a lot less scary). Saruman's might should never be used for heroic moves, fights ect. or Epic Renewal you should spend it on Epic Channelling and Ruination. He is the good sides best 'artillery' hero, I have in the past brought Gandalf with him and used Gandalf Epic Renawal and Touched by Destiny to call Epic Ruination every turn and needless to say cause massive damage.
The Council of Wizardry: On the face of this it these guys looks amazing knowledge of every spell in the game, Mastery 10, 5 might and a slew of special rules make them seem fantastic but there is two massive flaw first NO RE-ROLL FOR FOCUS DICE this is a massive problem as no one will be able to get more than about 3 spells of before failing a focus test meaning a huge chunk of there ability is lost each turn and second it requires you to have Saruman, Gandalf and Radagast in it meaning you can't use them as Epics. That aside there special rules do make them quite a good choice A Wizard is Never Late (re-roll priority) nice little bonus for obvious reasons but is in no way a certainty for success. A couple of there special rules do go well together so I'm going to do them together Will You not Consult with me (pick and enemy hero and on a roll of +4 you steal one of his might and give it to the Council), Counsellor and the formation 5 might means that they will rarely run out of might and allows them to help other units if need be. Master of Hues (Move 12 and attack as if cavalry) and Blessed Bands (Bane rule against all foes) make them better in combat but they are only defence 4 and only have 5 attacks which means even with resilience 3 they will die like flies these abilities act as a first and last line of defence meaning they can at least survive a few turns in combat and stay out of it if they need to, they can also use Blessing of the Valar to regain lost casualties if the need to. Lastly Thundercall (shooting attack at strength 10 unlimited range) which is amazing at taking down enemy monsters.
For the greatest Destruction caster Saruman wins hands down, he is purely an instrument of destruction whereas the Council of Wizardry even though it has access to the Darkness spell can't really summon the same destructive power and at 500 points are too expensive to fit into most armies (must be minimum +2000 as they are forgotten Realms) whereas you can get Saruman into a 800-900 point game and he doest A LOT more damage points to points wise than the council can. If you could house rule maybe swapping Gandalf's priority re-roll for a focus re-roll then I think the Council may actually be a viable helpful unit in a large battle but otherwise they are to ineffective for there points
Warrior Mage
These are people who can cast spells but also hold themselves up in a fight and include Celeborn, Thranduil and Glorfindel
Celeborn: I think that he has been given magic and the 175 point cost so he seems equal to his wife there is no description I'm aware of him being noticeable weaker than her. His Command spells are helpful (see Gandalf and Galadriel) and his statistics fight 7, resilience 3 and 3 might are very good, Epic Defence (+2 defence) and Challenge (Hero it is called against formation must charge and then hero must duel you or can't move if a -3 courage test is failed, this is great for taking on weak heroes or caster they don't want to get into a fight) are also helpful, add these to the Lord of Lothlorien (If Celeborn is in a formation of Galadhrim the entire formation may use his fight value) and he is a skilled and versatile hero.
Thranduil : I love this guy, he is 50 points less than Celeborn has the same stats(F7, R3, C6, M3) , no Lord of Lothrorien and has Epic Shot (cause D6 hits) and Epic Strike (increase fight to 10) instead of Defence and Challenge. This means he is more than capable of taking on practically anyone in a heroic duel (fight 10 resilience 3 is impossible to top from any hero worth around 125 points) and is fantastic at killing monsters thanks to Epic Shot. His Wilderness spells (Mastery 2) just add to the tactical options as they include both support and damage spells. If you don't care about theme or lore take this guy in every army you can, where Elrond tries to cover lots of roles but fails thanks to his massive price and lack of destructive power, Thrandruil is a jack of all trades for an amazing price who can switch to do whatever role you need him to with ease. Can't stress how much you should TAKE THIS GUY
Glorfindel: Glorfindel is a strange caster as he is a single model. His price is huge (250 points which is a much as a mumuk) but he does have one often overlooked skill. Harassment he has a movement of 12 (24 if you at the double) he moves and charges as if a flying monster meaning he can pass over/through enemy formation or go around the enemy so he is behind them which is where he excels. His stats (M8, F7, S4, D7, A4, R2, C5, M3) are good enough to take on a formation of archers especially if you cast Immobile so they can't shoot you. After they are sorted out you can use him to move behind the enemies meaning The Enemy is Upon us rule halves there movement and his spells can be used to manipulate the opposition and lastly he can REAR CHARGE meaning -5 dice, this is invaluable and can cause massive problems for your opponent. The only problem is his cost you have to do a lot of disruption for him to be worth his points and if your opposition have lots of archer he can can just get shoot to bits really quickly this means he require a fair degree of skill to use but is very effective is used properly.
You can probably tell which one I think is the best warrior caster is from my descriptions, the other two are good but Thanduil is so much better
AUGMENTATION
This is just a catch all title for all other spell casters who don't fit the other categories or who just have magic for the sake of being true to the source material
Fellowship: this is a prime example the only reason they have magic is that they have Gandalf in it. He can help them by replenishing casualties, making them cause Terror terrifying enemies (reducing courage) and immobilising/Transfixing them.
Gildor: As far as I'm aware the only non Epic named caster in the game, he covers a similar role as Glorfindel, where he loses the extra movement his formation has Ambusher meaning he can just pop up behind the enemy. His Mastery 2 Wilderness is also good at disruption and Natures Wrath is great at getting at archers in terrain. His formation are wood elves w/bow and +1 Fight for 5 points less than usual making them a good deal and his stats (F7, R2, C6, M2) are good and fight 7 means he can do some serious damage in heroic duels. He is interesting because his formation costs 160 for him and a banner bearer which is useless for archers so he theoretically cost 160 points which is a lot but then you have to take into account the formations Ambushers rule and there reduced cost and the fact he is like a captain (50 points) and a Stormcaller (100 points) mixed together.
The White Council : I have all the models for this formation and really try to like them but I can't they fall into the same category as Elrond trying to do to much they have some skills that make them good in combat Blademaster (re-roll hits in combat) and some that are good at keeping them out of it Voice as Saruman (refer to Saruman earlier) and Aura and Dismay (Terror test on 3 dice rather than 2, it worth mentioning this can also be used offensively) but they only have defence 5 and resistance 3 meaning they die easily. Well perhaps there better at magic Mastery 8 Wilderness, Command and Dismay and re-roll focus dice (Channel Magic) make them very good at magical support but no might regaining abilities and only counsellor means that there not brilliant at this either. They also face the same problems as the Council of Wizardry you can't take either Galadriel (who is amazing as an Epic), Gandalf (who is amazing as an Epic), Saruman (who is amazing as a Epic, are you seeing a theme) and Elrond (alright he is actually really bad on his own, theme ended) on there own no sane person would take them over Galadriel, Gandalf and say Thranduil for the same price (500 points) and together as individual epic working together would be much more effective and have the same combined Mastery level and spell lists.
There is no best caster here for obvious reasons but I will recap the best of the others in one place
Support: Gandalf the Grey
Destruction: Saruman
Warrior Mage: Thranduil