I've come to the conclusion that I am not a fantasy novelist. I'm actually a lazy historical novelist.
Fantasy, and SFF in general, works best when it uses the fantastical element to do something that it couldn't do without that element. Otherwise what's the point? Nostalgia? Another level of escapism?
My stories have very little actual fantasy in them, particularly the short stories I'm working on right now. I could probably replace the modest amount of magic in these tales with some other device and the story would still work. Indeed, some of these stories - if not the novel - could actually be set in our world, maybe with just a few tweaks to make the story and characters real.
Trouble is, I am part historian and that gets in the way. I studied history at uni for many years so I have a thing about getting it right. The details need to be bang on, the setting and the culture and the religion and the politics all need to be as historically truthful as can be. Get something wrong or be too anachronistic and the reader is taken out of the story, as well as the author getting annoyed. Then there's research. I'd need to do a lot of work understanding the historical moment I'm using for the story and, quite frankly, I've done enough historical research for one lifetime.
This is one of the reasons why I like writing fantasy, or made-up worlds. I get to use what I've learned about the past and how it works, but don't have the responsibility to get my facts right. It's my world, so I decide what's correct. There are exceptions. I do have to understand a little about how, say, medieval weapons work, how day-to-day life is led. Get that sort of detail wrong and it might spoil it for the reader. But overall I'm free to invent the world without too much need to read tons of biographies and social history.
Which is why I think I'm not really a fantasy writer. I'm a historical novelist who can't be bothered with history.
This doesn't answer the question of why have magic? Aeoland etc is pretty much medieval Europe so why not make it an alternate version of our world but without the wizards and hobgoblins? Excellent question. Any answer?