All of the Ernalda benefits are good. The healthy cows apparently become very fertile, so between the general quest benefit of more fertile cows and the specefic benefit, it makes a real difference--actually I think Ernalda is better for growing your herds than Uralda is.
There are side benefits to making peace with the elves, too.
When lost on a quest, an issarian quester who encounters Gustbran can often get him to make a wheel, and ride it out of the otherworld. That wheel is a treasure that makes your exploration go faster. Other questers with good bargaining may also get the wheel. Certainly some questers can never seem to get it. Sometimes I can get Gustbran to make a statue of Ernalda, but other questers always steal it away. Never gotten him to make anything else.
--Bryan
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