In general, I think banners are more useful for armies that don't get spear support (like dwarves) than others. So you probably had the right instincts. As far as numbers go, a reasonable 500 point list might be Gimli, a banner, and as many normal dwarves you can pack in (make sure you hit the 33% bow limit), something like this:
Gimli - 90
Banner - 38
12 Dwarves, 2H axe - 96
12 Dwarves, bow - 108
12 Dwarves, shield - 108
4 Iron Guard
500 points, 42 models, 12 shots, 3 might
Your bows will pay off better if you target high elf spears rather than the high elf shields
From your description I'm not sure you were using the spear support rules correctly. Elves don't really have a phalanx, the only pike carrying elf is the Guard of the Galadhrim Court, which is only in the Galadhrim list and hasn't been around all that long (at least, in SBG years). So the most support a high elf hero like Gil-Galad should get is one extra attack.
For your rangers, you shouldn't have them behind a line of shields. Any model close enough to shoot in that instance is going to want to charge or flee out of range the next, which means your opportunities will be limited. IMHO they are best for flanking, charging into spear support (throwing as they charge). Somebody did the math and proved that S2 bows with longer range gets slightly more kills than S3 dwarf bows, but I'm not sure that takes into account post-combat sniping of spear support. I think I'd rather have the S3 bow and save the 3 points per model.
As for scenarios, we play all kinds and I like them all so far. We generally build our armies and roll the scenario randomly. I've grown to really enjoy the random deployment scenarios (Take and Hold, and Clash of Piquets), it results in total chaos and forces you to be canny about how you group back up. I'm hosting a variation of Take and Hold tonight:
Rohan vs Easterlings ~700 points each
Deployment is as per special rules: 1-2 model doesn't arrive; 3-4 opponent decides where model is placed; 5-6 you decide where your model is placed.
Center is GW's ruined tower model. Unfortunately, some dwarvish adventurers are seeking treasure in there, and are hostile to all comers.
Objectives:
5 points for leading the dwarves' pony off the battlefield. It will buck and struggle, so if one model is in base contact they can only move 1/2. Two models can move it at full speed, up to a max of 8" per turn.
1 point for each dwarf killed
1 point for each model in the tower at the end of the game.
Game is over when one side is broken, and a 1-2 is rolled in the end phase.
Since I'm hosting, I'm playing the dwarves (one captain, 4 archers, 4 shields, 2 iron guard, 2 khazad guard). My rules are: must shoot at the nearest target, regardless of who it is. Can not move more than 3" from the tower unless someone is in base contact with the pony, in which case I can get into base contact with the pony (reducing its movement) or attack whoever is pulling the pony.
Should be quite a mess, which is exactly what a skirmish game is for