ARE elves & faeries are a better explanation of the UFO narrative than are E.T.s?

That's a very good question and probably one you will never get a great answer for. The deciding factor would probably have to be Christianity/Catholicism. Whether we like it or not they are a mive power in the world, even more so in the past, which basically live by "what we say, goes" and they say that UFO's are a possible thing and our "supernatural" creatures are just blasphemous lies. See that all started many years ago with the attempted annihilation of the pagan religion. They either stole ideals as their own or made them out to be lies, trickery and evil and to further emphasize this they burned anyone who believed in them. So as a natural result, over the years people have simply "forgotten" about them and they turned from fact into myth. Nothing more than child's stories. Sad but true.