For me this is perfect! It addresses all the concerns and flows far better than the original. I only have one gripe, and it is a new one:
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yet when the gold was once more revealed, then did a cry of wonder arise, for the things the {Nauglath}[Naugrim] had made were more wondrous far than the scanty vessels and the ornaments that the {Rodothlim}[Elves of Narogthrond] wrought of old.
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This for me cannot work. We have said in other places that Finrod brought the most treasure out of Valinor, and so this can hardly be compatible. Therefore I think we should remove the later half of the sentence:
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yet when the gold was once more revealed, then did a cry of wonder arise, for the things the {Nauglath}[Naugrim] had made were {more} wondrous {far than the scanty vessels and the ornaments that the Rodothlim wrought of old}.
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