That is correct. The priest did oversimplify; but he literally did not have time to present an in-depth study on every single one of his assertions. He was preaching, not writing a nuanced and scholarly critique.
Secondly, his oversimplification is only collateral to his thesis. It forms part of a multi-layered predication/introduction of the subject.
Thirdly, Tolkien himself said, "I dislike allegory - the conscious and intentional allegory - yet any attempt to explain the purport of myth or fairytale must use allegorical language." (The Letters of J.R.R. Tolkien #131)
Thus Tolkien admits to using allegorical language to convey meaning through the structure of mythology. Essentially he has combined a personally fabricated mythology - complete with a full-spectrum creation account and even “indigenous languages” - with allegory. To use his own word, this method is “tricksy.” It’s myth, it’s allegory, but not conventional myth or 1:1 allegory. And all the Catholic fans just want to say, “It’s Catholic.”
Tolkien deftly synthesized allegory and mythology; and I think this is how he packed his punch, how he got a “big bang” (pun intended) out of his buck. And this is exactly why there is in his work a great potential for danger to Catholics. I’d go so far as to say that in synthesizing allegory, fantasy, and mythology – and in such a potent, well written, fascinating, verisimilar and all-encompassing conceptualization – he wields a kind of magic of his own, a power to cast real spells, to produce walking dream states in the unwary minds of men.
There’s nothing simple about any of this. Yet we know that God is simple.
Thus far, part 2 of my reply to you.
The premise here is flawed. Tolkien doesn't say myth or fairytale must use allegory; he says an
attempted explanation of the purport of myth or fairytale must use allegorical language. He was referring to the allegorical language he was about to use in attempting to explain what his work is about, e.g. "All this stuff is mainly concerned with Fall, Morality, and the Machine..."
He says the less allegory is used in the story, the more allegorical language will need to be used in the interpretations, and vice versa: “And, of course, the more ‘life’ a story has the more readily will it be susceptible of allegorical interpretations while the better a deliberate allegory is made the more nearly will it be acceptable just as a story.” He is forced to use allegorical language in the explanation he gives in the letter for the very fact that he did not use deliberate allegory in the story.