I am not, primarily, a folklorist, but when studying sources derived from Elven oral and written history special considerations need to be taken into account. The first is the literal immortality of the tellers, and the greatly lengthier time where first-hand observers were able to recount their experiences relative to that of human lifetimes. The Red Book's segments on Elvish history would have had the assistance of at the very least Master Elrond, who would of had over 6,000 years' experience by the time that Biblo Baggins began the original There and Back Again that formed the foundational text of the Red Book. He would likely have also had the assistance of Glorfindel, who was even older than Master Elrond.

However, the second consideration is that immortality and an Elven soul does not prevent distortion, either by bias or by memory, and we must fully reconcile ourselves to the Silmarillion being such a text. The epic cycle tends to overwhelmingly focus on the Noldorin, or those cultures that created fusional cultures involving the Noldorin, leaving many of the Elvish cultures barely represented. Witness how our corpus of unfiltered words in Avarin languages among the Elves consists of, at best, less than ten normal words and perhaps a few more in the form of later Sindarised placenames. Witness how little account is given to any Elven communities elsewhere in Middle Earth besides Beleriand, and how mankind only becomes relevant to the narrative once individual human communities join in the War with Morgoth.

The concensus is that the general narrative is accurate enough, particularly since the heavy Noldorin bias does not prevent the work from grappling with Noldorin atrocities and the immoral acts of particular powerful chieftains and kings among the Noldorin. The problem is more in attempting to gain useful knowledge of early human cultures, where my own speciality of archaeology has tended to be more useful, as the Silmarillion is greatly unconcerned with much that is not of relevance to Noldorin Elves. It is also, due to its heavy Noldorin and Beleriand focus, a very geographically limited scope of First Age history; surely the rest of Middle Earth had history and events and loves and lives too. And in this we find the Silmarillion frustrating, for archaeology is of extremely limited scope when it comes to sunken Beleriand, so we find that narrative sources would be the natural method to replace this lost information with, if they were able to, and they are not. This is why many of the non-Edainic cultures from human history are far better archaeologically understood, because they lived in areas that were not damaged by the War of Wrath or the Drowning of Numenor.