Could a Dwarf melee with a Balrog?

[Gordis]

I believe Dwarves had issues with all sorts of creatures of the Shadow-World.

Gimli's debilitating fear when seeing the Barlog can well be explained by his own words to Celeborn:

"Indeed I saw upon the bridge that which haunts our darkest dreams l saw Durin's Bane," said Gimli in a low voice, and dread was in his eyes. -"the Mirror of Galadriel"

But how explain Gimli's fear on the Paths of the Dead before the mere ghosts of Men? Remember, Gimly was more afraid than anyone else, while Legolas was not afraid at all.

I think it might be explained by the Dwarves' relation to the "other side", the World of Shadow (or more precisely, the absence of such relation).

The Calaquendi Elves lived in both words and "wielded great power" both in the Seen and the Unseen. The same likely applied to Maiar. Both races did not fear the nazgul or ghosts and could fight Balrogs.

Ordinary Elves, like Legolas, were able to get some glimpses of the "other side":

"The Dead are following,’ said Legolas. ‘I see shapes of Men and of horses, and pale banners like shreds of cloud, and spears like winter-thickets on a misty night" (The Passing of the Grey Company).

Even mere Men were able to perceive the Dead at times

Theoden: "Folk say that Dead Men out of the Dark Years guard the way and will suffer no living man to come to their hidden halls; but at whiles they may themselves be seen passing out of the door like shadows and down the stony road."( The Muster of Rohan).

Dunedain with their strain of Elven blood were likely able to see more and master their fear on the Paths better.

Not so with a Dwarf. The fear fell on Gimli the heaviest, but he saw nothing at all, only heard whispers. Perhaps it means that the Dwarves have no access whatsoever into the World of Shadow?

Note that even the 7 Rings were unable to turn the Dwarves invisible, to transport them into the Shadow-World:

Dwarves … proved tough and hard to tame; they ill endure the domination of others, and the thoughts of their hearts are hard to fathom, nor can they be turned to shadows. (Of the Rings of Power…)
The dwarves it is said had seven, but nothing could make them invisible.( “Of Gollum and the Ring” in The Return of the Shadow).

The Dwarves seemingly had no power in the Unseen. Perhaps that's why the creatures of the Shadow-world (including the Balrog, the nazgul and the ghosts) were so frightening for the Dwarves?