My 'villain' is hiding in plain sight for the majority of the novel but, like Alisa's, not revealed until quite late on - at the moment my protagonist has her 'dark night of the soul' and all seems lost. The assumed 'villain' of the first part of the book also turns out to be not quite all they seem. And the 'real' villain is, in the end, acting for what they think is the greater good, having come to believe over time that the ends justify the means, and not fully realising the extent to which they've become morally compromised by that belief.
I've sometimes thought that the monster in 'Frankenstein' is, in fact, the hero of the story, and Victor the 'villain' of the piece. Shelley certainly gives the monster the best lines, as well as the most cogent and attractive philosophical arguments, despite his lapses into murderous behaviour. I wonder if the monster is, in fact, not a villain at all but an early 'flawed protagonist'.
As for your villain, I think that your descriptive writing is vivid. I liked the situation and there's some promising world-building too.
However, as Rick has pointed out, there's a lot of filtering. I would have liked to have experienced Elgah's terror and the horror of the Hag more directly through Elgah's eyes and physical sensations. So, for example, the very first sentence: 'Elgah was in shock, her senses dulled and body numb. She had never been in shock before but as the medical expert in her village she had treated it.' comes across as an objective, unemotional, external narrator telling us about what's happening to her. It's the POV of a camera. And the rest of the piece continues like that. We observe Elgah's plight rather than feeling it with her.
What are the actual, visceral physical feelings of being in shock? Not simply dulled senses and a numb body - that's a text book speaking. There's shivering, cold extremities as the blood retreats to the vital organs, shallow breathing... There may be nausea, confusion. Your skin goes clammy and you may have cold sweat... Your pulse is shallow and weak and you feel dizzy and close to fainting... We need to feel all that with Elgah.
'Her body was shaking uncontrollably. Her skin felt clammy, ice cold yet slick with sweat, and her breath came raggedly, fast, shallow, desperate, like a dying bird. Her pulse fluttered beneath her fingers, barely there, as she tried to take it with pale and bloodless fingers. She had seen cases of shock and she recognised the symptoms. But there was no-one here to treat her, and her own knowledge whirled and faded on a tide of dizziness as terror flooded through her like a dark wave. Dying. She might be dying. Here. Alone, at the entrance of the Hag of the Forest's cabin. And no-one would ever know.'
Here's another example that cries out for a more direct experience: 'In an instant the Hag was directly in Elgah’s face. This startled Elgah, with her senses already overrun, she fell straight to her bottom.'
This should be the writerly equivalent of the cinematic 'jump-scare', making the reader share the heart-stopping moment with Elgah. But the almost matter-of-fact 'This startled Elgah...' gets in the way of that, reducing the moment to an objective telling. Again, we need to feel the adrenaline flooding Elgah, the pounding of her heart, the scream that almost comes despite herself, the out-of-control stumble backwards, the disorientating fall and the pain of the landing... in short, her terror!
One other thought, and I hope this isn't too disheartening, is about accuracy and specificity of language. Take the important passage that starts:
Never could Elgah behold exactly what the old witch looked like...
You tell us that Elgah can't tell what the old witch looks like, but you've actually just described her in some detail - 'random long hair from her nose or ear', 'dry cracked lips', a 'balding scalp', even an 'isometric skull, 'constant tears of blood'. So which is it? Remember that Elgah is our viewpoint character, so if she can't see something, neither can we.
And then there's the Hag's eyes. They're at the same time 'ice blue' and 'dilated black pits that held no shine or reflection'. They can't be both. And anyway, if 'every capilliary' has burst, they'd be swimming in blood anyway, making the colour slightly moot.
What you've got, I think, is a great beginning. I think an edit to address some issues like the ones above would make the piece even more immersive and powerful. And I think that the Hag - as your villain - would benefit greatly from the build up that a more direct shared experience with Elgah would give.