A ton of work goes into character design. Concept artists who study character design get paid well and craft the characters you love from your favorite movies & games.
There are so many different character styles out there to pick from. One popular style is elven characters combining traits from a human with an elf. This can result in some pretty wacky character concepts. And I curated a huge list of the best(and wackiest) concepts into this elven character art gallery.