[Yregwyn]

They could create they just couldnt create new life forms, like Aule and the dwarfs. Aule made the dwarfs and they could walk and talk but were like robots is the way i interpreted it. Eru gave them feelings and free thought. When Aule took his hammer and was going to destroy them he noticed they were scared and begged him not to kill them, thats when he realized Eru had decided to let them be. Gandalf and the Balrog made fire and lightining when they fought on top of the mountain. It said thay people who saw it saw lightning strike and fire fly out from the top of the mountain, like a storm id say. When the Valar threw down Angband they sank Beleiand, I would imagine that they could use the flame imperishable to control the elements and do 'magic' and such, some would be better at certain things then others. Manwe and wind, Ulmo and water ect.... but i imagine they could all use them all to a extent.