Both sentiments actually pretty accurate, imho. Midgardsormr says he's rises only to join in the song. "Ishgard has sinned, Ishgard plans to sin again, Ishgard will burn." He hears Nidhogg sing for the march on the Holy See and sees no reason to stop it; they deserve it. Meanwhile, you show up knowing jack about the situation and act like the march should stop on your request. He sees you as an insignificant worm - no more love or hate than you would show an insect. When he moves to flick you off the tower, the blessing of Light blocks the blow, and that's when he gets angry.
To use vague religious mythology as a parallel, say a given God creates a hierarchy of more or less eternal Angels bound by some protection covenant. The leadership of Example City butchers and eats Hypothetical Angel hoping to gain their power, and Revengeance Angel steps in to lay down some old fashioned smiting. Archangel HQ sees this from on high and figures, hey, good for them. Smite on. And then Peasant from Another City waltzes up to the front desk, knowing nothing of this, and says, "Hey, bro, could you not? I've been meaning to visit that place." Might Archangel be rightfully peeved? Might Archangel smite this presumptuous ant, too, for good measure? Now imagine God him/herself blocks the blow... "Oh, come on..."
God didn't even step in when Example City was snacking on Hypothetical Angel! What is this!? So fine. If God thinks we have to listen to Peasant and Peasant says we have to look into settling this issue peacefully, fine. Fine. But I'm watching you. And if we're doing this, you're not tapping into God Mode everytime you stub your toe, either. God's weak enough as it is, right now. <slams door to blessing of Light>
Agreed. It's only a one-off line of small talk, but Estinien clarly infers that Nidhogg sensed what was going on and abandoned the "torture them forever" plan and the "get back my eye" plan and decided to finally just raze the place to the ground.