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Or, possibly it sort of shows that they are perfectly happy with their lives.
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I don't think that's it, look at all the sadness in their lays.
Could the alleged scarcity of elvish fiction be partly due to memories being more real to elves than the waking world? They surely had imagination, but they seemed to prefer dwelling on the vivid images (and sounds and smells and feelings) in their own minds. Elves, at least by the Third Age, seemed to be more concerned with saving and preserving than with creating something new.
Come to think of it, where are the fictional stories by men and dwarves and hobbits? Seems like nobody was really busy making things up at the time, (except for servants of the Dark Lord, though those stories usually went under the name of 'lies'). There's another theory. Could it be that the whole "lies that tell truths" concept had not yet come to Arda, and that made-up stories were either considered children's fancies or lies? After all, the truth was fodder enough for exciting stories! (Even if not every hobbit in the Green Dragon believed them.)