Long lived races:

The problems of the elves and dwarves were addressed to allow them to be playable by giving them class adventure levels like we see. If they didn't do that, then they'd have to be NPCs because a natural progression would allow any elf or dwarf to at least start out at 5th level or higher. So an appeal to this adjustment won't help us solve the problem of dragons. To be honest I'd argue that a 10th level elf would likely be a low level elf without the adjustment.

The wars with the goblins and orogs would keep these races at high levels. Their skills and craftsmanship would be far superior to other races as they have time to hone their proficiency into mastery. This makes sense as just about every setting gives tribute to their crafts.

Now to stick such long lived races into an rpg system they lose quite a bit. But for the sake of play we do so.

As for dragons we haven't really seen much of that except for the Council of wyrms. I don't know much about 3-4 editions if they approached dragons as playable. But I suspect that any attempt would likely lose something for the dragon to make it manageable and not dominate the game, which they likely would as described. Their power comes from being long lived and the nature of their being. Translating that into game mechanics would be a challenge to satisfy everything I would think, but not impossible.

Bloodlines:

Since it seems dragons are immune to the essence of the gods I come up with a notion. Perhaps they don't have souls. That would satisfy to some extent why that energy wouldn't affect them. Perhaps their race is of an elemental or titanic root that is much older than the gods themselves. Their power over mebhaighl and the greater ley lines may not need to challenge the regency of mortals. Tapping into the domain level is what mortals do, or more correctly what PCs do. Perhaps the dragon's power in comparison is limitless and so long as they live are connected to the ability to use their magic. If we leave it at that, it solves a bunch of questions.

A problem arises then for the elves and how they have bloodlines. Since they are a younger race perhaps they are susceptible to the bloodlines. I believe they are made of the elements so perhaps that is the difference with Dragons possibly being defined as rooted in the titans.

I am glad Gary mentioned the dragon bones as a focus for a source. It goes to show that they are of another level entirely if you ask me. To quantify them with a bloodline is possible, but why would they need it? They seem to be free to cast magic w/o worrying about it.

One thing I like is something I am working with in my idea phase for making a game is the gods arising from spirit essence win out over the forces of nature like the titans by putting them to sleep. Perhaps that is why dragons sleep so much as the divine essence slows them down? So in my game mortals should tread carefully or awaken things like the Baelrog of Morgoth in the depths of the earth or like (in my version) what Azrai did by awakening the shadow.