Yes Tolkien did change his mind about Balrogs and Morgoth's ability to 'create'. Externally Balrogs did come to be imagined as Umaiar, but in the early 1950s at least Tolkien might have been holding on to 'many' Balrogs despite being Maiar?
Apparently Morgoth could multiply the Umaiar according to the Annals of Aman abandoned typescript (or AAm*) section 30: 'And in Utumno he multiplied the race of the evil spirits that followed him, the Umaiar, of whom the chief were those demons whom the Elves afterwards named the Balrogath.'
CJRT notes that there seems no way to determine with certainty when AAm* was made, but he thinks or feels that it belongs to the first phase (early 1950s).
I'm not suggesting this was the ultimate conception, merely that it seems to represent an idea that followed the writing of The Lord of the Rings (yet preceded the note to Annals of Aman, mentioned in my earlier post, if CJRT's thoughts are correct).
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