"Fading"--you said it better than I could! I think I remember a line here or there saying Elves could "waste away from grief"

It's in LACE or somewhere else in Morgoth's ring. I read it recently, so it is canon. A while ago I tried to explain to someone that lingering does not equal fading. I gave up after a while because the person had a fanon idea and did not want to let go of that.

The point Dawn is trying to make is that there are more forms than fading.