[Farael]

The way I see it, the fight between Mortogh and Ungoliant was not like what might have happened between say Sauron and Gil-Galad.

At that time, Morgoth was still very much a "spiritual" being, he was not yet confined to his earthly form, therefore I'd speculate that "punches and stabs" wouldn't do much damage to him.

I don't have my books handy, but I believe that Ungoliant fought Morgoth with the darkness she could spew and so I'd speculate that the battle was more of a spiritual struggle than a physical one. Of course, the spiritual struggling might have had physical expressions (such as darkness and light, or perhaps cold and fire) yet this fight might have raged on for a long time on planes other than the physical one until the Balrogs finally came to the rescue.

Also, we should consider that balrogs were Maiar. Now, we have little information about balrogs but we do know that Gandalf killed one by physical means (he fought him with his sword and then the balrog fell down the precipice and died) yet maybe Balrogs went through the same process that Morgoth (and Sauron) did and started off as spiritual beings but became "trapped" in their physical bodies as ages went by. So perhaps, at the time of Morgoth's fight with Ungoliant, balrogs were still able to become wholly spiritual and as such they might have been able to travel great distances at amazing speeds.