In the real world, by which I mean on the planet Earth, which species you are is pretty important, and any non-human has considerably different capabilities than the typical human.

I see no need for science fiction and fantasy creatures that humans can communicate with to all be slightly different humans that aren't called humans, nor do I see any need to restrict player characters to being such creatures. That seems a lot less inspiring than providing other options.

For example, dragons might be big and strong and be able to fly and breathe fire, while humans are good with tools and stuff because they have opposable thumbs. This creates an obvious division of labor between dragons and humans, which allows each species to be more efficient and accomplish things it otherwise couldn't with the other's help. Which in turn gives humans and dragons reason to cooperate, even if they don't particularly like each other.

And if there's also a species of little people who have the ability to use magic or psychic powers or whatever, which neither humans nor dragons have, then there are even more opportunities for everyone involved, and things get even more complex and interesting.

On the other hand, the less functional difference there is between playable species, the less reason there is to have them, instead of just one species with a bunch of different cultures.

Perhaps the best part about letting "race" mean something is there's then no need for "classes". If you already have a real difference between characters that defines what sorts of things they're capable of doing, you don't need a weird fake difference. No need to work around the made-up difference's weird fakeness with "multiclassing" or whatever if you don't have it in the first place!