There is a lot you could do to expand on this character, to shore up some of the clashing details and to flesh it out.
The first major problem is the Idol he sees and decides to model himself after, an Elf looking up to a Human is inconceivable, it just wouldn't happen, the Elves think much too highly of themselves.
Then there is the idea of him training in Magic when his dream is to be a Knight, it doesn't really make sense, so there needs to be some sort of explanation. You have started on that idea, stating that he was too small, but it needs much more to it.
While in the Old World, did Arterius conceal his Elven heritage? Otherwise, he probably should have had a much worse time, there is room to expand here if you want to develop part of his personality. Use the time wandering to try and add to his story in some way.
I can accept that he worked on a ranch with a fiery beast, and that he was eventually able to to tame it, I like that concept, though two years is probably a bit long. The problem I have to make on this point is what he does next, he joins the Imperial Army in an unnamed city. This really doesn't work in my mind, if he is going to fight in the Old World as a lone elf it needs to be either as a mercenary, or as a volunteer during the Storm of Chaos (if you want to keep the Imperial army bit). Humans are unlikely to accept outsiders easily.
The last thing to mention is his equipment, the armour and bow both have stories behind them, but neither are touched upon in this version. When it comes to expanding the story, try to fit in these items.
Of course take anything I say lightly, they are simply suggestions and I am sorry if I come across a little strong, kind of tired lately so my thoughts are not all in one place. Take a look at the
RPG 101 course to see my Character Guide, or the ideas posted by other Mods on RPing.