but rather the smell and fragrance which it doth impart.
This part is also symbolic. Scent is another old symbol for the the spirit. I'll look for a reference for it.
But you asked specifically if:
"The argument is valid?"
I mean, it could be from a symbolic perspective.
The question is, what is the elixir? Are we talking about a messiah, an actual person? Or we talking about an idea? Or are we talking about a series of events?
The elixir could be a recipe of all those things: the right person / people, in the right place in the right time...
That's what makes it kind of a self fulfilling prophecy. It can mean so many things.
But, taking your question seriously.. I will continue:
God grant that through His gracious and invisible assistance, thou mayest divest thy body and soul of the old garment, and array thyself with the new and imperishable attire.
this part is about either eternal life or reincarnation? that's the goal of the elixir... that's the purpose of the transmutation? ( I'm putting question marks in here, because, I really have no idea, all this is pure speculation )
then the whole final paragraph is pretty simple? right?
Therefore, those who in every subsequent Dispensation preceded the rest of mankind in embracing the Faith of God, who quaffed the clear waters of knowledge at the hand of the divine Beauty, and attained the loftiest summits of faith and certitude , these can be regarded, in name, in reality, in deeds, in words, and in rank, as the “return” of those who in a former Dispensation had achieved similar distinctions. For whatsoever the people of a former Dispensation have manifested, the same hath been shown by the people of this latter generation. Consider the rose: whether it blossometh in the East or in the West, it is nonetheless a rose. For what mattereth in this respect is not the outward shape and form of the rose, but rather the smell and fragrance which it doth impart.
Dispensation is a period of time or an era. So the paragraph is talking about comparing people with "good spirit and good qualities" from those of the past to those of the present. It talks about comparing people of "good spirit and good qualities" from western backgrounds to eastern backgrounds. And it says at the end, basically... the form on the outside doesn't matter. It's what's on the inside that counts. The smell is a symbol for the spirit or the soul. It says the soul and spirit of the person are what matters?
That's it.
You asked if it's valid? My opinion. From a symbolic perspective, why not?
In America we have an expression: "Don't judge a book by it's cover." It's universally accepted as true by almost everyone.
Who or what is the "elixir" and who or what is the "touchstone" would be the part that determines whether the entire passage is valid. But the idea is quite universal. That's the point, right?