Plagues and other great diseases are important parts of history and some settings. They defy man and may even defy God in their swift and terrible punishment upon the body of society.
My issue with modifying/removing dwarves and elves is that the PC’s may want to play them.
One of the most powerful tools found in the World Building 102b article is the Worksheet. Here is a place to put the settings you might make with them.
Mining in a certain area turns all exposed skin (maybe just parts that are actively disturbing the chemicals that cause the reaction) of the those doing the mining to a dark blue color. Will wear off taking as many years/days spent in the mine. ... meeting a party of blue-skinned humans armed with pick-axes etc. Strange disease? Demon offspring? Curse? If they meet only one ex-worker, they will very carefully listen to any stories he says, no matter if drunken or insane, or just makes up to get a beer.