They are intelligent enough to have created their own magic system. Ku'lak are capable mages that use unique insect-based magic. Dragons Dragons are extremely proficient at fighting and spell casting. Harnessing the most powerful words of power for fire, the Dragons are capable of summoning incredible destructive magic Demons Demons are very intelligent and capable magic users. And yes Armor is very susceptible to elemental attacks.
Metal conducts electricity, can be super heated, frozen, or rusted.
That is a drawback to metal armor. While it provides excellent combat protection it doesn't help you against magic. Dwarves are known to be excellent smiths, and because of this they have an innate smithing skill of 30 to begin with as well as each smithing specialty. Each race will have different skills they are good and some races won't be able to learn certain skill regardless of how hard they try. The current model only causes the learning curve for ALL skills to increase for each skill point learned.