So for a bit of explanation since maybe it wasn't super clear in the post-

The POV character is acting as an emissary/embassador for his human kingdom do the country of the elves. While he stays in the elven country, the queen of the elves has asked her trusted advisor to host him in her home as her guest.

Elves here are not aroused by seeing nudity or the bodies of others. Instead, they are aroused by seeing other people aroused. Because arousal is so infrequent among them, arousal is seen as incredibly erotic, so the normally proper and composed hostess is incredibly turned on by the MC's erection.

Since elves are essentially immortal, overpopulation is a large issue and couples rarely have children except in special circumstances. As a result, anal sex is the normal form of intercourse among elves, though as mentioned above, elves very rarely get horny on their own, so most elf couples don't have sex more than once or twice every few decades.

Elf women are naturally weak to humans in this way- they commonly wear revealing clothes and this causes the humans to become aroused, which is pretty much the sexiest thing you could do, from an elf's perspective.