iirc blacksmith can't make armor. they do have a 20% or so bonus when using the npc to refine it though.
to make stuff like iron and steel you'll need minifurnaces, you can buy those at the blacksmith guild in geffen which would be located to the southeast. use a minifurnace and a menu will pop up showing the different things you can make with the materials in your inventory (similar to when you appraise an item)
to make weapons you need a hammer, though i'd suggest getting an anvil too for a better success chance. hammers are used the same way magnifiers and minifurnaces are used, the bonus however, is that you're given slots after you select your weapon so that you can put down star crumbs and elemental ore purities.
recipes can be found here:
http://www.merchantguild.net/~ragnamart/guides/forging.phphammers are one time use however the highest level ones let you make higher level weapons and also have a slightly higher success rate, anvils give you a bonus just for being in your inventory.