I really loved Pratchett's take on the elves, come to think of it.

Classical music is a bit different because it's effectively frozen in time. They're not introducing new instruments. They're not using amplification for the most part. It's like doing the same Shakespeare plays over and over again.

If there were a Beethoven today, he probably wouldn't be composing classical music. He'd be doing popular music of some kind. In fact, the historical record suggests he would have been a keyboardist in a rock band.

For music, a better example might be Jimi Hendrix. He was an amazing musician and his approach completely shaped modern rock music. But, while his music was influential, are his songs the best rock songs of all time? I don't think so, because other people have built on what he did and have taken it further.

Tom Bombadil is such a minor portion of the Shire, is that even something relevant to the narrative as a whole?

No, and that's why a better author (or their editor) would have removed it.

Fantasy, specifically, has evolved over time through the introduction of power systems sure — does that make them inherently better than LotR?

Yes. Not just because of their "power systems", but because the authors have used some of the ideas that Tolkien introduced, and told better stories with them, or introduced better characters. Or, because they lack some of Tolkien's key weaknesses, like they're able to write interesting 3-dimensional female characters. IMO the heavy lifting that Tolkien did is to introduce a world filled with all these various kinds of creatures that we all take for granted now: elves, dwarves, ents, orcs, etc.

He was probably the greatest fantasy writer of his time. But, he's "of his time". He unconsciously brings all kinds of biases and baggage into his writing that a reader in the 1950s wouldn't even notice, but that become more apparent 75ish years later.

You simply cannot deny the level of effort that went into creating LotR on Tolkien's part

Nor can you deny the amount of effort that went into The Room but that doesn't mean it's a great movie. LotR is a great book, but it's not because Tolkien put a certain amount of effort into it.

But, is it overrated? There are 2 ways something can be overrated. Something can be bad and rated as being ok, and so it's overrated. Or something can be good but rated as being the best in the world and so it's overrated. I think LotR is in the second category as a fantasy story. As a foundation for fantasy literature, I don't think it's overrated because it introduced so many things that we just take for granted today. But merely as a book, looking at it through modern eyes, it is probably overrated. I think it's great, but it's no longer the best fantasy book ever written.