Something i noticed about the Fae is how high quality their models are with emote, texture quality and general animations.
Honestly, it wouldn't take much work to bring them up to player character standard.
Make them a bit bigger and have them hover for their walking and sprinting animation, but stand on the ground to do attacks so they can use all the same animations the other races do.
Being gender neutral, just have them use male equipment.
I'd also like to see Gria. They're described as being small, So fitting between Lalafel and minimum Au Ra wouldn't be a stretch.
They're also Ivalician so their home technically already exists. I'd also be perfectly fine with the wings they have just clipping through gear the way tails do.
He's explicitly referring to young looking characters. Miq'ittens are quite literally Miqo children and exhibit very childlike features without even considering height.
Lalafells can't be mistaken for a child when viewed without other visual cues. Gnomes in WoW are the same, they look distinctly mature in their facial and body features. The only thing "childlike" about them is their height. Real life humans attest to the fact that adults can be smaller than children, height and busts both.
As long as a small race essentially looks like a tiny adult, there's nothing stopping the addition of more small races or barriers to the existence of Lalafells.