You are using the ACR module of Elements, which is the necessary component to 'convert' your raw files to image files which will open in the normal pixel editor of Elements (button 'Open'). Your conversions choices are saved by clicking on the button 'Done'. Ignore the 'save' button which only converts the proprietary raw format to the universal raw format DNG.
Start by clicking the 'help' button and have a look at the online help.
Raw images open first in the camera raw dialog. After using the sliders choose 8 bits/channel and then click the “Open Image” button to send into the regular editor. You can then use any of the tools and save as jpeg, tiff, psd etc.