I feel that it is crucial to mention that, to the degree your goal is to do something new and different, favored soul has extremely little to offer to differentiate itself from a cleric. Because the spellcasting uses the same list, the two classes play extremely similarly.
I also must say that, unfortunately, the favored soul has gotten extremely little support. Whenever any author after Complete Divine thought to write something for a priestly divine type, they were thinking of cleric, and they built around cleric features. Many, many options that would fit a favored soul, are unavailable due to the lack of domains and undead turning. There are therefore only very limited options for “optimizing” a favored soul.
But, for what it’s worth, here’s what we’ve got:
Abilities and Paths
For abilities, you’ll almost-certainly be Charisma focused, but you’ll need decent Strength and Constitution as well if you want to do melee.
If archery works for you (certainly works for Corellon Larethian), you can maybe beg your DM to allow you to take Charming the Arrow; it requires you to be fey, which you are not, but elves are pretty close anyway (they became fey in 4e, for example). Beauty’s Bounty from the same source is OK if you have feats to burn (which you won’t, but whatever). This allows you to focus solely on Charisma.
The other option is to go for large amounts of Dexterity; elves are good at that. That works for archery, obviously, but there’s also the finesse melee option. Can work, but I don’t think you’ll even remotely have enough feats for it, and spellcasting is much, much better anyway. Champion of Corellon Larethian from Races of the Wild is obviously fitting, though it’s more of a paladin class than cleric or favored soul, and requires way too many feats to be worthwhile. The other key Dexterity melee feat (aside from the obvious Weapon Finesse) is Shadow Blade from Tome of Battle, but from the sounds of things, your DM sounds very likely to ban that (which is a great shame, and a huge mistake, since it’s far-and-away the best-designed book in the 3.5 library). If for some reason this appeals to you and you want to do something completely different from what you were saying, though, I have described builds for doing this.
And yes, Wisdom can and probably should be all but entirely ignored. Intelligence will be similarly a non-starter.
Half-elf is just about useless. It just doesn’t get anything. All of its features are minor in the extreme. You are absolutely correct that −2 Constitution is a huge disadvantage in elves, but you can work around that without just wasting the opportunity that race provides (half-elf would be such a waste).
There are a number of options for losing that Constitution penalty, and the best of them for you just so happens to be core: wild elf. Wild elves have their own patron god in the elven pantheon, but as Corellon Larethian is the chief god of all elves, he fits. Anyway, the wild elf trades the Constitution penalty for an Intelligence penalty. Intelligence is literally your least-important score, so that’s a win. The bonus to Dexterity isn’t too exciting, but meh. At least you get trance, auto-searching, etc.
You need Concentration. That may literally be the only skill you can afford, though, as you are a 2+Int class with no intrinsic interest in Intelligence and an Intelligence-penalizing race. If you have more points, Spellcraft, Jump, and Sense Motive are probably my choices, in that order.
Nymph’s Kiss from Book of Exalted Deeds can get you another skill point per level. It also gives you a +2 bonus on all Charisma-based skills, which is awesome. Highly recommended feat. Plus, one of its benefits is a fey friend with benefits (or a true romantic interest, if that’s how you want to play it, but it this is a fey creature we’re talking about).
Medium Armor Proficiency, Shield Proficiency
If you want to be effective in melee, that means using both hands on your weapon. That said, you can still use a shield by using the animated property. This is kind of pricey, but eventually it is a good idea to get a +1 animated heavy shield. I would not use a shield prior to that point.
In a similar vein, medium armor pretty much sucks. Breastplate’s single +1 to armored AC over a chain shirt is not worth the cost, the weight, the speed reduction, or the extra −2 armor check penalty. On the other hand, once you can afford it, a mithral full-plate is great armor, so go ahead and use that when you can. Before that, stick to a masterwork chain shirt.
Favored Weapon Proficiency, Focus, and Specialization
These are good enough to justify using a longsword over a morningstar or long spear, but only just barely that.
Normally I would recommend Power Attack, but your base attack bonus is mediocre, and you do not have any way of maintaining divine power. Casting the spell at the beginning of every battle is a possibility, but that eats up an entire turn – just about the most valuable resource in the game. Anyway, at the level you’re at now, divine power is not available anyway, and the difference between good and medium BAB isn’t too extreme
At 12th level, you could take Melee Weapon Mastery in Player’s Handbook II. That’s another +2 to attack and +2 damage. While Weapon Focus and Weapon Specialization are much too small to be seriously considered worthwhile feats, Melee Weapon Mastery begins to look possibly competitive.
The follow-up feats to this, Slashing Flurry and Weapon Supremacy, require too much BAB and fighter levels, respectively, to take, which is a shame because Weapon Supremacy is literally the only feat here that I’m willing to call distinctly good.
As for actually building up your longsword, adamantine would be ideal. Barring that, get the base +1 enhancement bonus and then go straight for special weapon properties, not higher enhancement bonuses.
The 1d6 energy damage ones are OK; holy is quite good in the right campaign, and a favored soul of Corellon Larethian is hopefully in such a campaign. In a really specific campaign, bane is good, but only if you’ll be fighting that creature type more often than not.
The merciful property may be appropriate to your character, though Corellon Larethian never struck me as a particularly merciful god...
If you have Magic Item Compendium, then eager and warning are excellent for letting you go sooner; definitely take those. Everbright protects the thing, which is nice. Dislocator, dispelling, and binding can work to hamper other spellcasters, which is nice. For that matter, magebane is solid. Considering that you can heal yourself, vicious may very well be worth it.
Resistance 10 to three energy types; this is just a really small number (at 5th, it’s not bad). There aren’t any particular abilities or opportunities that this opens up for you.
For what it’s worth, fire damage tends to be most common, followed by cold and then electricity, but your DM could easily do things differently. Maybe try asking yours for advice, what he considers most likely to actually see use. Your character might potentially even be able to research that in-character, though most likely with someone’s help because favored souls are awful at Knowledge.
This is actually good, except it comes at 17th level. This would be OK at 10th, and really competitive at 6th or 7th, but at 17th you need to have figured out some way to fly a long, long time before that. Maybe you can sell whatever it was, or retrain a spell at 20th?
Cold iron and silver, at least, are not super-common, so this may actually apply. But 10 is still a really small number. Typical enemies at 20th level are hitting for 50 or more (much more) damage.
OK, now that we’re done with the small stuff, spellcasting is, effectively, your only class feature of note. It uses the cleric spell list. Which is large, and very, very good. Check out our existing answer about favored souls for more about leveraging it.
Note that as a favored soul, you have extremely limited spells known. It is worthwhile to try to expand this, and it is worthwhile to choose your spells very, very carefully. Do not pick multiple spells that do the same thing.
Since you want to be effective in armed combat, divine power is mandatory. Righteous might is also nearly so, especially if you go for melee.
Really, there’s nothing particularly special here. You’re just getting the classic overpowered cleric spells and going to town.
Tanking is not really about AC. I mean, sure, grab whatever armor is convenient, learn magic vestment, but don’t get too crazy. Stuff that applies to touch attacks is too expensive, stuff that doesn’t just isn’t worth much.
What you really want is real protections. Long term, death ward, freedom of movement, mind blank, and true seeing invalidate entire avenues of attack: those are what you want. The first can be gotten as an armor or shield property (soulfire, Book of Exalted Deeds), the next two appear as rings, and, well, true seeing is a little more expensive. Scout’s headband in Magic Item Compendium is probably you’re best bet, though it only works briefly – it’s cheap, buy several.
Spells are good here, but they’re usually temporary and for defense you usually want something permanent. Check out Ernir’s List of Necessary Magic Items for more advice.
Healing should be handled by wands; you probably don’t want any healing spells of your own. Just get a wand of cure light wounds or wand of lesser vigor (Spell Compendium) to heal up between battles. Encourage your allies to buy healing belts from Magic Item Compendium, if you can. That should cover you.
Summon monster is generally pretty weak. The monsters you get are often a spell level late compared to summon nature’s ally, with only Celestial or Fiendish to show for it (and those are not high-power templates). Luckily, houserules in your campaign mean that these spells’ biggest downside, the 1-round casting time, is being ignored.
If you really want to focus on summoning, which you kind of have to to make it worthwhile, you want the malconvoker prestige class from Complete Scoundrel. That doubles the duration of your summon monster spells and makes them summon an extra monster. Malconvoker is specifically about using evil against itself; its benefits only apply to evil outsiders, which it also lets you summon without losing good alignment. Unfortunately, malconvokers really want to use summon monster pretty much all the time, which means as a spontaneous caster you really have no advantage (since you’d just prepare summon monster in all, or nearly all, of your slots).
On the flip side, having the cleric spell list, i.e. having divine power, means that you are able to take classes like malconvoker while still, potentially, wading into combat. You could even follow malconvoker up with thaumaturgist, which is decent enough for the whole binding thing. Still, if you get into a fight without having time to buff, you are looking at just not having enough turns to turn everything on (summon things, cast divine power, and so on).
Either way, if you’re going to do any summoning at all, you want to read Mastering the Malconvoker, even if you don’t take that prestige class. Its discussion of the best options for each summon monster are crucial to getting your mileage out of those spells.
Debuffing and Damage
You cannot afford the Wisdom necessary, so your save DCs are going to suck, so just don’t take any of these spells. Your damage should be coming from your weapons anyway.
Something different: capitalize on Charisma
Charisma is a great ability score, but favored soul does little with it. However, if you instead did a couple of levels of paladin, you’d get Divine Grace and add it to all saving throws. A level of bard gets you Inspire Courage, and allows you to take Snowflake Wardance from Frostburn, to use Charisma for attacks (with slashing weapons). Actually, with Champions of Valor’s web enhancement, a paladin of Milil can get Inspire Courage instead of Detect Evil, but that’s not an option here.
Gauntlets of heartfelt blows from Dragon Compendium gives you fire damage equal to your Charisma. A level of hexblade would let you use hexbands from Magic Item Compendium would allow you to add Charisma to damage against cursed foes. At high levels, slippers of battledancing from Dungeon Master’s Guide II are very expensive, but allow you to replace Strength with Charisma for attacks and damage (at which point you would no longer need or want Snowflake Wardance). The aforementioned Divine Might adds Charisma to damage again for one round, using a Turn Undead use.
So that means using Charisma to attack (twice, if you use Smite), and Charisma to damage up to four times. That’s on top of Charisma for all saving throws.
Is this a good idea? No, spellcasting is still much better. But it is different. And there are options for some spellcasting. Complete Divine also has the divine crusader prestige class, which lets you get full 9th-level spellcasting in just 10 levels – from just one domain. Anyway, it’s great for picking up those levels in paladin, bard, maybe even cleric just for the Turn Undead uses. It’s not a high-power choice by any means, but it does at least make your Charisma useful for something.