Lyra, I'm not sure Tolkien would have thought that there is a difference. Other than a few random comments, I'm not really qualified to answer, but-- 
Have you read lmp's thread, 
It feels different near the Shire?
I wonder whether I would classify LOTR as an "epic fairy tale romance".  Tolkien called it a "romance" in his letters (as in Epic romance?)  while I think he thought of The Hobbit as a fairy tale.   I should look it up.  Do you have a copy of Tolkien's letters?  And have you read "On Fairy Stories"?