Sin? I wouldn't quite say sin, just misguided, like the innocence of a child, he doesn't know right from wrong when it comes to certain things.
Of course the Light Elves were greater then the Dark, but only slightly. The elves born in Aman were greater and more glorious, but had the same flaws as other Dark Elves. Look at Feanor, enough said. It really all depends on the elf. Then look at say, Elrond, he wasn't an Light Elf.
On the matter of why the Valar did not intervene during the War of the Ring, it was because when Aman was removed from Arda at the end of the Second Age, their power itself was partly removed as well. It's like severing a vein or artery, the still controlled certain things, but could no longer "drop by" at will.
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