The specifics would be lost on her for sure, but she gets the gist. Even the idea of orcs also being elves doesn't throw her for too much of a loop - neither exist outside fantasy stories in her world, but in those stories the idea that orcs somehow or other came from elves, or were elves, isn't entirely unheard of.

"Oh, halflings are-" She gestures, indicating a height somewhere near her own elbow. "Little people, hairy-footed, shy of humans. But they only exist in stories, where I'm from." But she doesn't give him long to digest that, because she has questions of her own. "You said they vanished- how'd that happen?"