In short, these limits balance elves without arbitrary level restrictions for the class, something other systems have struggled with given the greater power of most magic.
|All elves are naturally magical regardless of profession or lot in life...|
However, elves are seen as being innately magical, and may even detect the presence of magic in a way that human's can't. So how do the rules reconcile this with the stated limits of elven spell casting? Simple answer: That's up to the referee! However, the referee might consider the following:
Elves are naturally magical, so their power (spell points) comes from within and is, therefore, limited by a body's capacity to store the tremendous energy even a single point represents.
Humans, on the other hand, are not naturally magical and must wrestle the same energy from the surrounding world, which is nearly unlimited, although still very hard to do.
Thus, an elf's greater magical utility is also their greatest limitation. But consider this: Every elf is an accomplished spell caster, while very few humans can ever master these mysteries, although any who do can become powerful indeed.
So why can't elves do this? Simply put, elves seek harmony with nature and refuse to impose their will upon it, and what humans see as a convenient source of power, the elves see as careless and foolish meddling with the universe itself, which can be a good way to frame racial relationships within a game.
Still, the immortal elves are powerful in their own right, and this might be reflected through the following:
OPTIONAL RULE #1: POWER MINING
Elves can spend 3 hits in place of 1 spell point, but only in desperate circumstances. These might be allowed to function at the elf's full level for duration/effect.
OPTIONAL RULE #2: SPECIALIZATION
Elven magicians (not fighters) can choose to specialize in their initial spell selection. Instead of learning new spells with level, their existing ones improve as a human magician.
Elves have a special relationship with magic, and the rules described above can help capture this without unbalancing the game or marginalizing human spell-casters. Being virtually immortal, elves can see first-hand the danger of tampering with the cosmic balance, and this can be used to describe a campaign's unique cosmology, framing the relationship between mortal, power-seeking humans and the immortal elven race to the benefit of all!