What happens if I ignore the Tree-Hugging Elves?

Depends. Sometimes the elves will notice and take action, and other times they will ignore it.

If they do notice, it is also possible that the worst that can happen is that they leave as soon as they arrive. In a worst-case scenario, I think they can be provoked into outright fighting you. (Not sure if that counts as a war / siege)

Don't forget you can also build barrels out of metal if you are in a biome with plenty of ore. In some biomes, metal is as close to infinite as you're likely to need when you consider how many z-levels down the map goes. Fuel may be less infinite, so magma becomes important quickly!

Two other advantages: metal barrels sell for more (and elves will buy them), and the metal industry employs more dwarves than the wood industry so you can support a larger population.