I agree somewhat, but with caveats.
A conflict over how many cookies one sibling gets compared to another is not something to write home about, even if the circumstances leading up to it are detailed, complicated, and may even be interesting.
A good story is founded on a GOOD, and interesting/involved conflict. Usually a moral dichotomy, dilemma, or a struggle for survival.
You are describing every story ever written except the more experimental ones. And a conflict about cookies can certainly be something worth writing about, if one can do it believably and skillfully. Cocteau's Les Enfant Terrible hardly describes anything momentous. A series of quite trivial things, mostly, and the story comes about because of the tension about growing up. Short stories have been written about the polite smile of a stranger. And they are fabulous.
The actors make the story believable, and the world makes the actors believable.
No, actors too must make the world believable, because it's the actors that are supposed to be representing the world, not vice-versa. The world exists to represent your own ideas. Some people call the world another character, but I think that's a mistake, except in the sense that, like characters, it should be a representation of your themes. If you get your themes from making worlds, well done, but I certainly don't believe the idea that worldbuilding is the most important part of "good narrative" or "high fantasy".
Which is also why you get http://images.mmosite.com/photo/2007/09/18/l2_elf0015PriqT08a3.jpgas the first hit when you Google "Elf".
In many ways, the traditional "high fantasy" setting is our mythic era, even if it only superficially resembles any real time period. It's where we have our Hercules and our Gilgamesh and our Ulysses.