The question is are Elves and Dwarves in the Genus Homo, if yes than cross species is definitely possible, but if they are in lets say Genus Australopithecus, it would be questionable because that signifies a split were the DNA becomes significantly different, though both are still in the Family Hominidae.
As for extraterrestrial aliens, well that would get really questionable, and in my opinion would be as likely as a horse and crocodile having offspring. But can easily be remedy with some simple writing, such as their home planet is physiologically identical to earths and therefore life evolved much the same as earth and reproduction is compatible.
But like I said, it's fiction, no one really question how Facehuggers really work, how they inseminate a being and take on the host's DNA. How do Predators breed? I've never seen a female Predator in the movies, not that I know of. The point is I don't think anyone would be turned away by cross race breeding as long as there is some simple explanation of how it's possible. It's not like anyone can really prove otherwise.