I think the Xenosaga trilogy makes a pretty darn good job at explaining the "magic" and "supernatural elements".
One of the biggest plot points in FF XII was the magic of the world, it was directly involved in the main conflict and I think it's explored fairly well there, also in FF VI,VII,IX and to a lesser extent VIII.
I think there are some great storylines in videogames and I believe the medium itself has potential to outdo any other when it comes to storytelling, it has the potential to tick every box(music, writing, visuals and immersion). There are a few outstanding storylines in videogames if you ask me even if the average video game doesnt have one.
At the highest possible caliber I think videogames already outdo movies and novels but that's just me, there are much fewer examples of excellent narratives, that's a given, but movies and books have been around for far longer.
If the best novels were "translated" into a visual novel and they were done right, I think they would be vastly superior to the book itself. The same could be applied to movies if done right, that would require finding a good balance between the interactive nature of video games and the pacing of the narrative in films. The interactivity adjacent to the medium allows for a bigger emotional involvement from the audience.