Bigotry may be a better word, there. Racism has a number of slippery meanings. Using one of the broader ones I could be called a racist- since I do believe that there are (statistically speaking) real differences in some traits and gene frequencies between human races- despite the fact that I am not a bigot and am actually angered by bigotry. But in common American parlance you are correct.
Given that I would call them the same species if they can interbreed, "racism" seems like the proper term. Surely, if elves and orcs actually existed I think that the same term would be used, since "subspeciesism" is a bit cumbersome. And from a meta perspective the word "racism" is emotionally charged enough to get the point across that the beings you are talking about are actually fellow sophonts who love their children, too...
They could, or could not. Certainly there are American bigots who would say that "Asians are tolerable, but the blacks are total animals." One need not be equally bigoted toward every other ethnic group. The extreme "we hate everybody" white-power groups are actually the radical fringe of American bigotry. Most of it is much more subtle, though not less damaging for it. One sees the white-power nutjobs in the media more often because such stories are more sensationalist, so they sell eyeballs. It's all about the money; the American media sucks.