Ethno-nationalism versus civic nationalism
And why I choose the latter
Ethno-nationalism does not necessarily mean racist, as ethnicity relates to a national or cultural identity, not to skin colour in itself (if you take race to mean skin colour, which some don't). It does however have a genetic element, because to be part of that identity you generally need to have an ancestral link to your countrymen, or at least the geographical region your country is in.
If you take Britain as an example, for a thousand years we have generally been a mix of Celtic, Anglo-Saxon and Norse (including the Normans). Before that it was Celtic and other types of ancient Briton. Pre-mass immigration (1948 onwards) there have been small amounts of other migration (such as French Huguenots, the Dutch and Russian/Eastern European Jews), which will be in our gene pool. Thus I consider ethnically British - as opposed to civically British - as being able to trace your lineage back to pre-mass immigration Britain. There will be some genetic overlap and nobody has absolute purity; but if your ancestors are mainly of English or British ethnicity, then in my book so are you.
I, for example had a DNA test which found me 83% English (Anglo-Saxon), 6% Welsh, Scottish and Irish (Celtic) and the rest Germanic (5%) Dutch (4%), and Danish (2%). These tests are not completely accurate and subject to constant re-evaluation, but the results do mean I can consider myself ethnically British.
So too, does my family tree. My father has traced this to the 16th century on his side and the 18th century on my mother's side. It isn't a complete tree, although quite a lot of it has been uncovered. In the information we have, there are no records on either branch of anyone marrying a spouse without an English or British name. Neither do the children of these unions have non-English first names. Of course, some immigrants, such as the Russian Jews of the nineteenth century, were known to change their names in order to fit in. However, my father's family came from rural Somerset, where there was even less migration than the negligible amount that would have been found in London and the larger cities. My mother's family came from Norfolk, which again would have been a very homogenous area, with a few Dutch settlers in the larger towns during the religious wars of the 16th century. I suppose that's where the Dutch bit comes from. It is reasonable, then, to say that I am from a predominantly English - or British - ethnic background.
Does it mean I'm superior in some way to someone that isn't? Of course not - but it means I have a familial bond with this country and its traditional culture, which I think makes me prouder of it and more willing to preserve it. It is this logic that many ethno-nationalists probably have, rather than just 'hating brown people'.
Civic nationalism, meanwhile, promotes dedication to a country and culture - but on political, not ethnic grounds. It is about equality before the law, people of different ethnicities buying into the collective culture, and meritocracy. Many conservatives attack the concept as meaningless and pathetic because it ignores the notion of ethnicity and, they believe, it gives nationhood away cheaply. I disagree with this, because the concept still has an interest in preserving the nation and its traditions. It just doesn't exclude people who don't fit the ethnic mould, which in the modern world is an increasing contingent. I would rather have an ethnic Ghanaian who fully accepts British culture and benefits the country than an ethnic Pole who doesn't care less about it and brings nothing. Many ethno-nationalists would consider the Pole ethnically (or indeed racially) closer to the British, and thus prefer him.
Neither does civic nationalism have to involve 'multiculturalism' - in which parallel cultures exist together rather than one unified and homogenous culture. Nor does it need to be a pushover in terms of immigration. Wanting those already in the country to integrate and hold shared values is a different proposition to letting many others in. Civic nationalism doesn't even need to involve any further immigration.
I consider myself, then, a civic nationalist, because we need to work with what we have and give those already here a chance to be part of Britain, so long as they integrate (I want no more mass immigration though). However, I am not squeamish about drawing ethnic distinctions. The fact of the matter is that for centuries the British and English have had a predominant genetic makeup. There is no harm in saying that, and no harm in having positive feelings about it. It's time to stop the self-loathing the intellectual elite tries to impose on us.
This is a really important and pertinent topic in the present political climate, so I am glad you are addressing it. Unfortunately, it is also one that is perennially swept aside in mainstream discourse for being somewhat taboo. The assumption of civic nationalism (alongside multiculturalism) has been essentially implicit since WWII. Yet there are several notable forms of both ethnic nationalism (not just the distasteful racist/xenophobic kinds) and civic nationalism (not just the naive multicultural kind), but what I believe you are describing is actually something like "cultural nationalism".
Ethnicity is a rather tricky concept, since it does not exactly correspond either to racial identity or cultural identity, but some vague combination of the two, with emphasis on what constitutes a "people" (or "tribe" or "nation" according to the Greek root) – there is usually if not always at least some ancestral component, however. "Civic" nationalism, on the other hand – as I understand from my reading on the subject (and speaking with a friend who happens to be a scholar of the philosophy of nationalism) – is inherently based on a notion of "citizenship" (hence the "civic"), and grounded in the adherence to abstract principles, most commonly those of classical liberalism and "democracy" of some form. The insufficiency of the purely negative principles of liberalism (however admirable they may be) is quite apparent in modern Britain and more widely, and I'd imagine you might agree here. Certainly they do not come close to defining what it is to be "English" or "British", since many other Western states adhere or claim to adhere to them. Perhaps we British have taken them all the more for granted because they were born (or at least put into a coherent philosophical framework) here by the likes of John Locke and Adam Smith, albeit during times when we were clearly a monocultural and monoethnic society, and took that for granted too. Perhaps this points to liberal democracy being grounded in our native and ineffable culture, and not cleanly separable from it in the way many advocates of purely rational, abstract, universalist ideas advocate. (Of course, the French philosophers also played a big role in creating liberalism of a slightly different variety during the same approximate period.) Still, one can be a "liberal ethnic nationalist", and I personally have a lot of sympathy for that idea, as I do for what I term "cultural nationalism".
The question of the importance of shared ethnicity, or more specifically shared ancestry, in binding together a nation into a stable well-functioning one is really the central one here, as I see it. It was interesting to read Suella Braverman's recent article "I will never be truly English: here is why", which, whether or not one might agree with her or like her, is surely a brave piece to pen in this day. I have faced a similar conundrum, as someone with a non-British surname, albeit a minority of ethnic English ancestry, the rest being from Ireland, western, and central Europe. Perhaps (I don't know) this makes it easier for me to assimilate into the "English nation" than someone visibly of South Asian descent like Braverman, even though there is no doubt we are both culturally overwhelmingly English and British, having been born and raised here in harmony with the native culture. There are other examples like Ben Habib (notably half-Pakistani half-English by parentage), who I think ascribe more or less to "cultural nationalism", though I've no idea whether he would make a self-declaration akin to Braverman. I would ultimately like to think, like you, that shared culture and a cultural identity is much more important relative to race/ancestry in cohering a healthy society. Nonetheless, the question of the impact on behaviour of perceived origin/ancestry – whether this is merely human nature, and how easily it can be overcome – is a crucial if uneasy one.
Sorry, I now realise this has turned into a very long comment, though I hope it's still of interest!