Lake Riza looks beautiful to me, and a fine option here. I do like the idea of them being in a fixed location to start with, so the conditions can't be too harsh, and the food has to be fairly abundant. So, a freshwater lake, plenty of fish, maybe a lot of birds around for eggs, the kind of forest that would have a lot of berries and edible roots growing in it, and of course deer, rabbits and other yummy creatures in abundance. (No one will be upset if we show them hunting squirrels, right?)
I realize that a modern American audience is often horrified by any details of where food comes from and how survival works, but my grew-up-on-a-farm sensibilities very much encourage me to tell everyone to go stuff it. How much we show will be up to those discussing the particular scenes, but I think we should work out a reasonable viable material culture for the elves even if it is not seen.
So, anyway, yes, good
As for the, hey....how do you have forests without the sun? The answer is....shhhhh.
We had the Lamps, the forests grew, and...now they are just kinda growing realllllllly slowly, like a taiga forest, while waiting for the Sun. Or something.