[orionsixwings]

Don't know if this has been said before, but Gandalf along with the four others that were sent to Middle Earth were not allowed to use their natural powers against the enemy, Sauron. Of course, Gandalf, Saruman, Radagast, Palando, and Alatar were all equal to Sauron in terms of power (they are all Maiars), but as the Istari, the physical form they were given when they were sent to help Middle Earth, they were prohibited by Eru to use these powers and instead were only there to guide men using their powers of persuasion.

That is the reason why you don't see him wielding his staff as though it was a wand, conjuring spell after spell after spell. He did fight Saruman in the film though, which was fun to watch.

Balrogs are demons that are beyond the abilities of normal warriors. In fact, Gandalf said it himself in the film, the enemy was beyond any of them, except him. The magic that he used to defeat it was great even though it wasn't flashy.