I love it! Every name got made up at some point in history and they are all used today so why not this name?
Galadriel has a really mystical sound to it imo. Its a guilty pleasure of mine too. If you want to use it I say go for it(& I"m not saying this because I'm a LOTR fanatic) :). You could come up with a few cute nn's for this too. Some I already saw were Adriel (which I think is beautiful),
Gala, Gali,
Ali, Adri, Riel, Rie, El ... yada yada you get the picture. :D
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Arie~