The stats received imply quite a lot:
Average intelligence -- The polymorphed creature shouldn't be perceived as a simpleton or ignorant. No penalty to knowledge checks implies an average level of knowledge.
Average wisdom -- Should appear to operate on basic common sense (knows when to come in from the rain). No penalty to sense motive checks implies not naive.
Average charisma -- Interacts normally with others. No penalty on diplomacy checks implies that it knows the niceties of local interaction, and generally doesn't come across as creepy.
So when you polymorph the hair into an elf, you get an elf. They might be missing very specific knowledge (like the best place to grab a coffee in the major elven town), but they are otherwise indistinguishable from another perfectly average elf: They know what gods to worship, how to interact with each other, how to care for themselves in their native environment, etc.
Individually, your elves are fine. Average, but fine. Where you're going to run into problems is as a society. Your elves are going to be completely lacking in specialists:
No great leaders to run the society.
No great architects and builders to build and maintain their cites/infrastructure.
No great generals to protect them.
No great scholars to remember the details of their history.
No great priests to maintain their relationship to their gods (beyond the basics of worships the average elf knows).
How big of a problem this is depends on what your PCs do to prop up the new society, and how you handle the advancement of NPCs in non-adventuring classes.
Note that this assumes an elvish mono-culture, as is typical of D&D. If there are many elvish cultures in your world, the PCs should either pick one or the DM should select one at random (or pick the most dominant one).
The helmsman could be weird...
Neither constructs, elementals, oozes, non-native outsiders, plants, nor undead need to sleep, therefore the helmsman could be a creature with any of these types or take feats or prestige classes that transform him into any of these types. However, a helmsman could also take...
- The general feat Tomb-tainted Vitality (Libris Mortis 31), among other effects, grants the creature the ability to go without food and sleep (yet the creature must still hydrate—whatever). The feat's prerequisites include the feat Tomb-tainted Soul (LM 31) and a nongood alignment. The feat gives the creature a "freakish skeletal appearance"—which seems a little judgy. Also, giving the helmsman these feats likely makes naming the helmsman Charon no longer optional.
...Or the vessel could be trapped (but in a good way)
Using the feat Craft Wondrous Item (PH 92) the vessel could have installed near the wheel a magical trap (DMG 74) that's a boon trap (Dungeonscape 135). Boon traps are horrible, notoriously both vague and broken, but this boon trap will be used only for...
- The 4th-level Clr spell remove fatigue [trans] (Book of Exalted Deeds 105) grants 1 touched creature/2 levels the benefits of 8 hours of restful sleep (but casters, if they need rest, must still get it). The spell removes the condition fatigued if present and permits the target to rest 1 hour to remove the condition fatigued if, before the spell, the target had the condition exhausted.
The DM must decide on the boon trap's precise effects, but it probably won't cost more than 50,000 gp, which, while expensive for such a trivial effect, really is a trivial effect. Taking the wheel'll trigger the boon trap which will cast the spell remove fatigue on the creature, letting almost any creature serve as overnight helmsman.
Trivia
There're no penalties for not sleeping unless sleep's necessary for something else, like preparing spells afterward. However, everyone knows sleep's a thing, so folks sleep even if the game doesn't mandate they must.
For those who will not be constrained by petty, demanding reality, Elder Evils, under the additional sign of the apocalypse Appaling Fecundity, presents some rules for sleep deprivation, saying that
A living creature can go without sleep for a number of days equal to its Constitution modifier (minimum one). Thereafter it is fatigued, remaining in this state for a number of days equal to its Constitution modifier (again, minimum one); if it would become fatigued during that time, it is exhausted instead. Each day after that period, the creature takes 1 point of Wisdom damage. If the total Wisdom damage exceeds its Hit Dice, the creature is affected as if by an insanity spell. (ElE 9)
The book then goes on to mention that during the Appalling Fecundity sign, one can't recover the Wisdom damage caused by lack of sleep (which is pretty clearly not the case for normal sleep loss). To clarify, the Wisdom damage accumulates until the creature falls unconscious, and lack-of-sleep effects (fatigue, exhaustion, Wisdom damage, insanity) are fixed only by sleep.
Although presented in the context of a Sign of the Apocalypse, these are decent (if long-winded) rules, finally published near the end of the game's run, for those who insist their characters needn't sleep. (Although anyone who insists his character needn't sleep will probably also insist these rules be ignored unless that sign of the apocalypse is present.)
Best Answer
3.5 elves are both woodsy and civilized, wild and cultured.
Elves are short and slim, pale-skinned with dark hair and green eyes (but no facial hair). Elves "trance" instead of sleep, and they live more than 700 years.
But the 3.5 PHB1 reveals a fundamental problem with elves which just gets worse as the edition continued to talk about them in other books. D&D elves draw on two primary sources: Tolkien and the Child ballads (though it's likely that the Child influence is mostly filtered through a handful of secondary sources). These two notions of elfness conflict, and so D&D elves are peaceful, but warlike. They are close to nature, but highly civilized. They have a broad perspective and rarely experience extreme emotions, but they respond to insults with violence.
This vision of elves is schizophrenic, totally different depending on who's writing them and just plain hard to nail down, so 4e wisely split them into two races. I'll mention the drow as well, for completeness and because their history is tied to the origin of elves.
Please keep in mind, though, that the 4e Points of Light setting is not firmly established. You will find variations and even contradictions in the lore depending on what you read where; they deliberately muck about a bit with continuity, because ultimately such things are in the hands of the GM. What follows is my understanding of the general history, based on trying to piece together disparate conflicting sources.
Eladrin are the Tolkien-like High Elves and drow are their disowned relations.
Civilized and regal and aloof, innately attuned to the arcane arts, eladrin are the flagship race of the Feywild. When the dark goddess Lolth rebelled against the other two Feywild gods, a group of eladrin joined her side in the ensuing war. Lolth lost, and her followers were cast out. They moved into the Underdark and became the dark-skinned, insane, spider-worshipping drow.
Eladrin are slim, often fair, with hair in pale metallic colors, pupil-less eyes in vibrant cool colors, and pointy ears. They have no facial hair and little body hair, and stand about as tall as humans. Eladrin "trance" instead of sleep, and they usually live over 300 years.
The elf is the eladrin's hillbilly cousin.
During and after this war, many eladrin left the Feywild entirely and settled in the Mortal/Material Plane. After generations, they became elves: closer to nature and slightly shorter-lived than their eladrin brethren (though neither race lives nearly so long as the 3.5 elf), they are hunstmen and craftsmen. Elves live in trees instead of spires and are more associated with primal magic than with the arcane arts.
Elves are slender, with tan and brown skin colors. Their hair comes in the colors of the leaves in autumn. Like eladrin, they have pointy ears, no facial hair, cool-colored eyes (though they have pupils), and are about as tall as humans. Elves sleep like humans do, and they usually live at least 200 years.