Hope Mirrless Lud in Mist I thought was a beautiful read, Lord Dunsany's King of Elflands Daughter is another good one.
...you're always going to run into a certain amount of fighting and drinking (and possibly wenching) in an adventure story.
As I was telling j.d. in an earlier post, humor is the key I think. Just like a cozy mystery can have murder and blood but still be cozy with the use of humor, so can fantasy.
or Mervyn Peake's Gormenghast novels might be of interest (although they are both quite heavy-duty)
Yes humour is always the key for me too, in any genre actually, fiction or nonfiction. Another book came to mind: Rivers of London by Ben Aaronovitch. I read it very recently and enjoyed it very much. A charming lighthearted fun read. There are lots of humour and the characters are very interesting. We have a thread about the book somewhere I think. In fact I'm going to get the 2nd one in the trilogy - Moon Over Soho.
Cozy fantasy is a great term - I think it would apply to pretty much everything where the setting is fantasy but the people are real. Real people just aren't up for those big, world-saving, doom-laden swordmaster plots - they pull the covers over their heads, or just keep eating. Their stories are smaller and easier to digest.