I think there's something to the idea that the elves put a little bit of themselves into what they made. And the reason the swords glow only when orcs are around may be because orcs were originally elves, corrupted by Morgoth. It just seems to make sense that the positive and negative would have a strange reaction/repulsion regarding each other. Of course, the orcs sure hated the dwarves, too, but that's another story.
-lmp
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