Okay, but why hair? Why is it so common for anime characters, even those set in actual normal-ass Japan, to have strangely colored hair, and yet not have, say, elf ears or third eyes or random other fantasy features? Like, if your argument is "because fantasy," there's a lot of stuff that that would explain that we don't see nearly so often, so... clearly there's something more going on.
And while I think there is something to be said for the eurocentric idealization, I do think there's something to be said for "because faces are hard." Wildly different hair colors are an easy and obvious way to distinguish characters. And this also explains why there are so many anime characters with blue hair, purple hair, white hair, etc. Honestly I find it super convenient. I'm terrible with faces.