I currently have a dark elf that's a hybrid of a mage and a thief, custom class. I'm thinking about starting a new character that's just pure stealth as a wood elf, because it's pretty hard as my hybrid. It's hard sneaking up on people.

I often do hybrid classes to encompass my best gaming qualities mixed in with what I might be roleplaying.

Well, the thing with hybrids is that if you have too many unconnected abilities you'll need to raise close to every attribute to get your skills in to a good place.

Agility is very important to sneak, even if it's at skill 100. Same with any skill. As a mage, I might raise athletics and acrobatics even though they are misc skills and be faster and jump higher than before, but I usually have no majors or minors based on speed and strength other than unarmored. So, I might be able to jump higher than before, but still never as good as a class who will raise strength in the normal course of play,

Theoretically, a dark elf can be as good as any other sneak character, but not right off the bat. It will take patience and it will take agility. Particularly if you didn't take agility as a favored skill. If you do take it, 50 is a respectable start (DE normally starts at 40).

Compare that with a wood elf who starts at agility 50 and can start at 60 if favored. Plus they get a +10 sneak bonus.

Neither. My characters change over the course of games, in response to events they experience. I don't even think in terms of "classes." In my opinion, "class" is an outmoded concept in RPGs. It needs to go.