I did do it and we had a lot of fun. FC only brings a stocking of small stuff like novelty socks, chocolate coins, a bookmark etc and brings it whether you are good or not (otherwise how does the little shit in their class always get presents?)
So no blackmail involved on any level. My sons are teenagers and last year was the first year they let me not do it! Basically he is an elf that is sent from FC to see if you go on the naughty or nice list but because he himself gets up to mischief then clearly you can be a great child who does some "naughty" stuff too. Obviously FC sent the elf, trusts him, knows he is up to mischief but still has him as an elf and sends him back every year. God, it is just a bit of fun.
I think 2 is too little. Pinterest has a million things that the elf can do. Some days he just moved around the house, he was found in the cutlery drawer, the fridge, inside a non-school shoe as you can't touch him or his magic rubs off. Ours only moved around downstairs, my children have very fond memories of him and Ds1 loved being in on the secret to continue to make it special for Ds2. (they are 17 and 14 now)
He brought Cookie Crisp cereal every 1st December because I would never buy that shite for my children.
He covered the Christmas tree with their underwear or wrapped it in toilet roll, it was just a nice tradition, and yes they still get a box of Cookie Crisp on 1st December.
As a child I had a very religious mother who was quite miserable about Christmas, my Dad on the other hand went overboard with decorations etc and made it incredibly special. Even now, the man is 79 and wears Christmas jumpers, has Christmas dinner sets, napkins, glasses, gravy boat, you get the point. He loves Christmas. I wanted that for my sons.