You should see it as you and a friend getting an ant colony. After all, to actual gods, we probably aren't much more than ants. Even if ants that they care for a lot. If you care for your ant colony you'll naturally start caring for the ants themselves. But would you care just as much for the ants of your friend? Sure it'd suck if his got destroyed, but hey you still have yours right? Granted this god is a bit more uncaring about other races than that. She doesn't interfere even when her ant colony is attacking the other one(s). But it comes close.
As for the second point. The reason is simple. Basic humanity. Look at real life, what do at least a part of the human race prefer? They prefer thinking less of "others". Be that another clique in highschool, different religious afiliation, a different country, different skin color, you name it. Because it's easier to put others down than to raise yourself. Is it logical? No. But sadly, preferring feeling over logic is also part of humanity. And the Melra extremists are a minority just like those kinds of people are a minority in our modern world. So I'd say it's a pretty realistic interpretation of how things would go with multiple races and gods.
If not correcting them when they misinterpreted her "teachings" even though they kill and negatively discriminate because of them is how she reacts with her "kind of friends' kids". I can't imagine what it would be if they were her "kind of enemy's kids".
Next point is; while I do get that different people have different set of values and ways of doing things. Isn't it more noxious than benificial if they focus more on getting the other "inferior" races under them, rather than actually focus on bettering themselves? I mean wouldn't you naturally raise above and be recognised as the leader if you work on yourself rather than fixate on the supposed inferiorness of others to feel elevated?
Maybe I'm a little bit confused in my reflexion... Any thoughts?