"Instead of askin who made our folk songs we should be asking why they were made"

They were made for exactly the same reasons people write songs today:

To express an emotion;
To express a grievance;
To entertain;
To make people laugh;
To make people cry;
To win the heart of a potential lover;
To make a living (either money, shelter, food, or drink).

And sometimes, for the sheer hell of it.

etc, etc, etc.

A few people would have been good at at it; the majority shite.

Those few that were lucky enough to be able to live by their art would have either been inspired or have 'borrowed' their ideas from extant sources.

Plus ça change . . . . .

It's archaeology (not history) and, in the absence of supporting documentary sources, the artifact (the song!) will sometimes help one to discover the "when", "where", "what" and "how"; but very rarely can one identify the "why".