Elf-like creature, fine and insubstantial (5)
I believe the answer is:
fairy
'elf-like creature' is the definition.
(magical creature similar to an elf)
'fine and insubstantial' is the wordplay.
'fine' becomes 'f' (abbreviation).
'and' says to put letters next to each other.
'insubstantial' becomes 'airy' (similar in meaning).
'f'+'airy'='FAIRY'
(Other definitions for fairy that I've seen before include "Tinker Bell was one" , "Cobweb, perhaps" , "Sprite with a toadstool for a home" , "Creature of folklore" , "Eg, Tinkerbell" .)