I think that there is no difference between the magical aspect and the physical one of the powers of Galadriel, since they are 'integrated' and mixed with her extremely vast Knowledge, insightful Sight of Minds and Beauty; the definition of Power, in the Tolkien's Universe, is, especially for the Elves, very comprehensive and wholistic.
This supports the fact that Gandalf the white is more powerful then, as Gimli has seen her and therefore she would have been referenced with Sauron as beings more dangerous.
As far as Galadriel not diminishing: While her sphere of influence increased in the third age, there is nothing that says her power increased. The ring allows her to channel her power without losing it (we see this happen to Melkor, as overtime he pours himself into middle earth and greatly diminishes from the height of his power.)
This is the entire idea behind the rings of power: Then Sauron went a step further and actually imbued his own ring with his essence, in an attempt to dominate the other rings.
When we look at depictions of Galadriel it is very important to think about who the historian is: in
The Silmarillion it is a translation from elvish by we presume bilbo, so all the stories are from the point of view of elves. When we look at
The Hobbit and
The Lord of the Rings it is from the point of view of a hobbit, Bilbo and Frodo respectively. In
The Silmarillion we see a more petty view of Galadriel, where she is not seen as a big player in the 1st age, while in
The Lord of the Rings she is written as basically a goddess, which to a hobbit I'm sure is quite a logical take away. I'm not trying to discredit Galadriel of her due praise, but there is no way she can take on a Balrog or winged dragon in anything other than a battle of wills. As soon as the fight gets physical she is doomed, everytime we see a Balrog killed it also involves the person fighting it (be they mighty elf warrior, or even maia in the case of Gandalf) dying.
if this is a fight to the death than the order would be as follows:
Glorfindel beats Balrog (possibly dies again) and maybe the other elves and Saruman
Elrond beats Balrog (probably dies while doing so) and maybe the other elves and Saruman
Galadriel beats Balrog (probably dies while doing so), possibly the Witchking, and maybe other elves and Saruman
Saruman possibly beats all elves and Balrog, but the odds are he gets walked
Balrog is on mostly equal footing with all elves, probably takes out Witchking and Saruman
Smaug walks everyone up to Balrog, who he probably beats as well. Gandalf *might* be able to do something, but that's the only person with a chance
Gandalf takes everyone except for Smaug and the Witchking.