Walls may certainly provide that sensation of safety which naught else can give; I agree with you. That being said, I personally feel much safer within Lothlórien's castle than behind the mightiest wall of stone. It is perhaps connected with the great defensive features that the player can dispose of, thus making up for the lack of physical barriers. On top of all, the combination of the pervasive healing aura being emanated all over the fortress, the dreadful silver-thorn arrows and the mist (which someone named deadly mist) always proves itself a grand defence mechanism to be reckoned with.
I can't be of much help, if we are to make an enquiry into the Edain Mod's past, being it long and quite eventful. I may only tell you how the Elven factions used to function in the 3.8.1 version, replaced by the current 4.0 major upgrade. Well, both factions did exist as separate options back then. All was BFME2-based, though, and the generalities of the game were quite similar for every faction. Lothlórien was nonetheless characterised by speed and versatility, if my memory avails me well, while Imladris would still retain its quality-related essence; furthermore, pretty much all heroes were present at that time, despite having different abilities. Just to list some examples: Elrond had a more prominent mass-slayer connotation, Celeborn had been given an incredible set of powers which catered for multiple roles (from the one of a hero killer, to that of a unit supporter or even mass-slayer) and Galadriel was not as effective as she currently is. Now, they were given more defined roles in Edain 4.0, rendering the outcome more enjoyable and lore-accurate; Galadriel is a prime evidence of that, for she's now more in tune with her actual character and has at hand more interesting features to play with.