Many Tolkien fanfictions feature sex: be it a tender lovemaking, a passionate affair, or a shady non-con event, desire is so closely interwoven with love that any romance will have to cope with it. And indeed Tolkien, however couching it in biblical terms, does not deny this simple fact, making desire, with or without love, a plot-point in several of his tales. Elves can lust (see Celegorm and Lùthien for more details), Valar can lust (Melkor after Varda and then Lùthien), and about Men, we already know the answer. Hobbits fall into the same category, even if we have no tragic tales to show its dramatic consequences.
The great question remains: how should one cope with sex in a Tolkien fic? It all depends on what genre you're writing in, with erotica and graphic bringing it at the core of the tale, and generic romance fics featuring it more or less according to the author's tastes and intent. The fact that Tolkien did not indulge in explicit sex scenes does not mean, as some canon-pickers argue, that any self-respecting Tolkien fic should follow his example; the absence of sex as an all-round event in canon is but one of the tantalizing gaps the fanfiction writer is freer to explore.
This said, just like we have our own rules and taboos about sex, so do Middle-earth races.
Hobbits's and Men's conceptions of love, desire and family are similar enough to our own that, taken for granted that a medieval society would prefer its members to arrive illibate to marriage, people will have it their own way, as they have always done and always will. In the idyllic context of the Shire's numerous parties and fairs, with long stretches of unguarded fields, bucolic little woods and discreet hedges, it would be difficult to imagine the local youth not daring to exchange kisses and more to the blissful pretence of not knowing of parents who did the same.
For sure, Sam didn't touch Rosie before their marriage; Sam being one Hobbit and the Shire lacking a structure of priests or pastors haranguing their congregation about the need to stay pure until the moment they tie the knot. You relish in Hobbit fics where Merry courts the girl and makes out with her behind the buffet's tent? Go forth and write.
About Men, the higher you get in the social structure, the more important is for sex to be controlled. While Eomer is probably free to go around seducing all the maids he wants, Eowyn is a princess and as such her virginity is a political commodity, not only a token of her virtue and love. Again in the absence of any religious structure imposing purity as a value, a milkmaid has nothing to lose if she messes around with the shepherd boy, unless she gets pregnant; a princess or high lady represents power and rank, and her relationship with the opposite sex will be a closely guarded one. Acknowledging this fact makes you realistic to the situation, and it does not imply that an enterprising character won't be able to get around it, or try and get caught. If the plotline is good and the characters fully-fledged, sex is a component of the story you may use to any extent you like.
Elvish sex is a more complex thing: endless flame wars have been waged about it. The ultimate source about it is the Tolkien essay 'Laws and Customs of the Eldar', which canon-pickers delightedly use to stab to death any romance fics not conforming to it. While it is good to know LACE, and sometimes use it, remember one thing: we have good laws saying we shouldn't steal and kill and a nice custom of sleeping only with those who want to sleep with us, but that doesn't mean that people won't rape, rob and murder.
LACE says that Elves marry in order to have children, like sex but will stop having it after a while, that for them sex equals marriage and 'seldom is any tale of lust told among them'. As my friend Encairion aptly puts it, 'seldom' is the key word, as it is no synonym for 'never', and overwhelmingly tales will be told about exceptions, as Celegorm's dealings with Lùthien, Eol's with Aredhel, or Maglin's with Idril show. So if you want to have Elves who intensely desire and make love throughout their long lives, go ahead; bear in mind that they won't be the rule, but that would be true even in a human context, as no one is the same as someone else.
A delicate issue is that of marriage. Elves got the custom of holding a wedding ceremony from the Valar, while their most ancient tradition says that when two people sleep together, they are married. It makes sense: for the nomadic, primitive culture the Elves had before meeting the Valar, and that the Silvan Elves kept until they met the Noldorin exiles and afterwards, religious beliefs are very sketchy and your spouse is simply your mate, that you sleep and have children with. In the Elves the spirit is stronger than the body, so when they make love, the spirits of the lovers mingle and are specially bound in a way that has no correspondence in the human world. When something like that happens to you if you have sex, you're not likely to hop in the sack with the first person that comes along.
Also, Elves don't get married or have children in times of war, as they think them unsuitable for raising a family, and being immortal can afford to wait for more family-friendly times; and, at least in theory, Elves get married young, like Fëanor did. Right. But, again unfortunately for the supposedly inexpugnability of LACE, we have a ton of Elves in canon who married late, Galadriel the most notable among them.
The het writer Dawn Felagund develops in her Another Man's Cage novel-length fic an interesting way around the LACE precepts, with a theory of Elvish spirits 'rejecting each other'. It's fascinating, and a good example of how an author who knows canon can successfully think up ways of nestling her own plotlines in it while keeping its form.
Drawing the sums, if your Elvish characters make love, they will be married, and won't feel the need of any further ceremony; what happens then when Elves have sex with any other race?
Among other things, point 7 will deal with this issue; first, let's take a look in detail at what a complex thing writing sex in fics is.
6. You-know-what: calling things by their name
Not everybody is comfortable with reading and writing explicit smut, and that's the reason why warnings and ratings exist. Nobody says your romance will be incomplete without a sex scene, and indeed some of the most powerful romances I have read or watched filmed do perfectly well without them. We don't think that Jane Eyre desired Rochester any the less because they never actually did it before they got married; and the fact that a kiss is the most daring thing that happens between Maximus and Lucilla in Gladiator takes nothing from their wondrous chemistry.
Some authors like to have their dose of graphics; others, while they have nothing to object to reading it, prefer to adopt softer solutions in writing, going in rather for suggestions and allusions. The choice is completely up to you: it depends on your style, your preference, your talent lying in writing one thing rather than another. You can keep it chaste, you can make the reader guess what happens off-pages, you can make it as adamant as Nenya what happens between your characters, or eventually give us a mix of it all and bring the temperature to steamy hot without actually choosing which formula to adopt.
Desire in romance often lies more in the atmosphere than in the actual scenes, reflecting real life where sex ain't always the best thing, and it can be disturbing, or bad, or sad, or non-con. If you feel that you are not up to writing the scene, work on the atmosphere: it can tell us a lot more than a thousand empty and badly written graphics.
Which brings us to the vital point: if smut embarrasses you, don't write it. It's cringe-worthy to say the least to read a romance and meet the words 'so we did you-know-what', or 'I let him do what he wanted', or 'she did this, he did that, putting the thing into the thing and doing the thing.' (And I swear I've found each of these.) Perhaps you're at your first fic, or very young, or simply quite shy, and even the anonymity granted by writing on the internet under a penname is not enough to reassure you. No damage done: you'll write that lovemaking scene one day, only not quite yet. Writing is a process of trial and error, but if you can't muster the courage to call things by their name, forcing yourself to write graphic is bad for your writing, your readers, and your own self-esteem as a romance writer.
There are wonderful books out there and fics on the internet that can show you how good erotic writing can be done, if you are interested in learning; just like some published works are just as bad. For some help on the matter in the Tolkien-fics fandom, check out Pink Siamese's excellent Authentic Smut: A Writer's Guide.
7. Culture Clash: Man meets Elf
Interspecies romances make up a heavy percentage of Tolkien romance fics, what with all we human girls falling for Elves. Man/Elf is the most common, indeed the almost exclusive inter-racial romance, what with Dwarves being next to unknown to romance writers and Hobbits posing embarrassing problems of height when coupled with ten-foot tall Elves.
These stories put us in a position to develop fantastic plotlines of star-crossed lovers, racial issues and tearful farewells, but they have one big fact weighing against them: if you want to be realistic, as author Tyellas once put it,' in Tolkien interspieces sex is tragic'. Yes, it is. We have Lùthien and Beren, Idril and Tuor, Arwen and Aragorn, Mithrellas and the Lord of Dol Amroth, and Aegnor and Andreth, the only male Elf/human girl in canon, but their stories all caused devastation, loss, sorrow and war. Either the Elf gave up immortality (a case limited to Lùthien and Arwen, and for very strong destiny reasons) or he/she ditched the human (Aegnor and Mithrellas), or, if she managed to snatch a happy ending (Idril), it was a unique and more than unique case. Think about it a moment: immortal marrying mortal is a big mistake. One ages and dies, the other does not. It's pretty to think of yourself at twenty with Legolas; how about your eighty years old self?
For extensive angsting about such matters, get out of the fandom and check out the whole Bella Swan/Edward Cullen matter; and while you can become a vampire, you definitely can't become an Elf. You want the interspecies story all the same? Go ahead: there are fantastic fics about such couples. Only know that the 'they lived happily ever after' ending is out of the question, and that if sappiness is what you want to write, you can't fit it here. If instead you're a member of the 'loving angst' team, such as yours truly, interspecies sex is a safe road to torturing love stories and existential dilemmas.
As per point 5, Man/Elf couples pose us an interesting problem about marriage: how will the bond be formed? Humans can't form the spiritual tie Elves create, not at least in the same way. No answer exists to this problem, in which case you're completely free to invent. Perhaps they could sleep together, believing to have no future, and the Elf shall discover the bond can't be formed on his/her part alone? So they will get married the human way? Or shall they resist the temptation, get married with a ceremony, and discover it the first night of marriage? Fanfiction is beautiful also because it allows us to explore such deep issues, and the space to solve them is practically unlimited.
Another aspect of these couples that too often is left unexplored is the different cultures Men and Elves bear. While Aragorn was fostered in Imladris, and had an Elvish upbringing, other Men know Elves only as legends or fleeting glimpses: how will they react to the meeting of these different backgrounds? How will they overcome the differences? Will they even speak the same language? Many authors seem to consider such issues unworthy of their attention; try instead to see it like an extreme culture clash in human terms. Pocahontas and John Smith had miles to cover in spiritual terms before getting close enough to fall in love; and the differences they explored in their relationship are what makes it so unique. To go back to Tolkienian examples, when Beren met Lùthien he found himself in a whole new setting: proving himself willing to risk his life to be accepted.
One last note: half-Elven children are not discriminated against by the Elves. Actually, Elrond himself is one of them, and quite proud of it.
8. One-off: do Elves love only once?
While the idea of Elves loving only once in their long lives sounds very romantic and quite appropriate for these creatures, we have solid proof in Tolkien's writings that this is not so. In the Silmarillion, the Elvish lady Finduilas was in love with the Elven warrior Gwindor; when she met the mortal Tùrin, to put it like Tolkien would, 'her heart turned to him'. While however Elves can love more than once, and indeed fall out of love, as it happened to Fëanor and his wife Nerdanel ('they became estranged', is the Professor's way of phrasing it), their laws are against them marrying more than once, except in extraordinary circumstances.
Finwë, Fëanor's father, was married to Mìriel; after their son was born, she felt weary of the world and her spirit forsook her body to go resting in Mandos's Halls. However much her husband begged her to come back, Mìriel declared she would not. The years passed. Finwë met and fell for another lady, Indis (another case of Elves loving more than once), and asked permission to marry her. The Valar agreed, on condition that Mìriel swore she would never seek to abandon Mandos' Halls; if she had been reincarnated, as Elves generally are after the death of their bodies and a period spent in rest in Nàmo's abode, Finwë would have been bigamous. Mìriel gave her consent and the marriage took place; given the troubled consequences, however, marrying more than once is for Elves an idea to be frowned upon.
Once we consider these cases, however, the question that comes to mind is: what would happen if an Elf fell out of love with a living spouse and then in love with someone else? LACE tells us a cheating husband or wife would be immediately caught out, for, it says, the Elves have ways of seeing immediately whether another Elf is married or not, and if the Elf is speaking to them is lying. Can we take that at face value? Again, no. We have instances of Elves lying to other Elves and getting away with it: see Fëanor, who declared to Fingolfin he would ferry his host to Middle-earth and then come back for him (he didn't). Or Celegorm, who told Lùthien he would help her (while actually abducting her).
Here is one of the cases where Tolkien's writings are in conflict with each other. In the confusion of the sources, you're home-free: use your imagination, and find the answer. (We need more fics where Aredhel betrays Eol with Caranthir. Just an opinion.)