Obviously it wasn't Heine, but rather Clemens Brentano who made a woman out of the rock. The legend of the Loreley is much older though.
For the "lore" part I also found the meaning "elf", but I cannot confirm this. (LORELEY in Der Große Brockhaus, 1935, says: "from Middle High German lur = elf". I don't have a dictionary of MHG and it's not in Grimm's Deutsches Wörterbuch, so I don't really know
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