To directly answer you question after reading the rules: No, 8 hours of light activity is not a long rest. RAW (to my interpretation) says that a long rest must be at least 8 hours, and if more than 2 of those are light activity it isn't a long rest.

I think it really depends on how you parse the rule -

"A Long Rest is a period of extended Downtime, at least 8 hours long, during which a character sleeps or performs light activity: reading, talking, eating, or standing watch for no more than 2 hours."

Because while I can see what you're saying, I can only read that as 8 hours spent sleeping or doing light activity, with the most intensive part allowed being guard duty for no more than 2 hours (thus necessitating shifts, and because it presumably involves patrols and things like that.). Mostly because of the ':' placement and how the "2 hours" seems appended to guard duty specifically and not the overarching "light activity". Otherwise I think it would say something more specific like "during which a character sleeps, and may perform up to two hours of light activity: reading, eating, talking, or keeping watch."

There is one thing that I think would solve the issue, but I can't find the answer - What is the RAW cause for gaining levels of Exhaustion? Is it missing sleep, or is it going without long rests?

How do you rule Trance? Because it just replaces sleep with meditation, it doesn't mention how that relates to rest periods. Do Elves have a 4 hour Long Rest period or do they still have to spend another 4 hours just hanging out to get the full benefit?