The Lorien elves certainly would count as kinsfolk in the south and so (though not in the time of the Hobbit) would the elves who dwellt at Edhellond but that is an improbably long distance for commerce.
As for the burning south - well all things are relative and Rhun is considerably to the south of the location of the Narn i hin Hurin. If you think of Beliriand and the Shire representing Scandinavian / Celtic countries and Harad as (at least North) Africa then Rhun could be more mediterranean. I have a celtic complexion and find Spain far enough south to burn
. The nature of the wine of Dorwinion gives a hint - heady and to be drunk from small bowls. this suggests a dessert wine, or a fortified wine like port or sherry rather than a say a light german riesling type.