I've thought about
Melkor's lack of involvement in the early days of the Quendi quite a bit and I haven't found any real answers.
As for why he did not destroy them, it could be he feared
Iluvatar. That seems reasonable enough to me. But I don't think he would have wanted to destroy them quite yet, it could be he wanted them to serve him along with the
Ainur that he wanted as his subjects.
What gets me, is why didn't he go among them and become their lord? The
elves knew nothing of Iluvatar and the
Valar, and considering the way they took to the Valar when they did meet them, it's easy to assume Melkor would have had no trouble ruling them.
Here's what I asked in another thread:
Melkor could have destroyed the
race of elves early at Cuivienen, but instead he only took a few and caused them to fear
Orome.
Melkor did not try to have the Quendi worship him yet, but only wanted them to fear the Valar. Looks like the beginning of turning the elves against the Valar, but if this was his intention he was very subtle and had only began. Just what was Melkor planning with the elves? To let them increase in the world and then go in for the domination, and bring them up against the Valar? Why didn't Melkor go among the elves and feign friendship? Why wait for the numbers to increase? But we can be sure Melkor was scheming as usual, so what was he planning?
Men, he used as a tool of
evil, he ensured that a race destined to thrive in the world would be doing his work all the while, but if he was so nihilstic at this point as
Tolkien says in Myth's Transformed, why didnt he just kill these men while he could? Why should a nihilist be planting seeds of evil when he could have destroyed then and there? Did he want to bring them all up against the Valar and maybe eventually Iluvatar? Was he getting pleasure out of displeasing Iluvatar with having won over his children to evil?
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The elves... I am not satisfied with this answer, but it is the only thing I can come up with that would make any kind of sense: Maybe Melkor knew the Valar would invite elves to
Valinor, and wanted the elves to go there, thinking they would be of more use to him that way.
Aman was the only part of the world that wasn't under him at this point, and also the dwelling place of what he would have thought of as his biggest threat. With this, the reason for him causing elves to fear Orome, would be to keep them to himself long enough to figure them out well enough to be able to fool them later. Melkor going among the Quendi at Cuivienen would cause the Valar to be careful in protecting the Quendi against him forever after, maybe. But elves would have been a better tool once in Aman, on enemy ground, than they would as a small few hidden away in the darkness of
Middle-earth only to be discovered soon by the Valar. So, elves
weapons against the Valar in
Arda, and Men against Iluvatar.