Yeah, like above, 8 bits is the way to go when you are ready for a final output, in fact as you've seen you have to use 8 bits to convert to a jpeg.
Your Raw processor is setting things to 16 bits -- you can actually change that to 8 bits if you want, but many of us keep a "project" in 16 bits to get the maximum latitude in processing. It gives a similar advantage to what a Raw file gives -- more bit depth means more data that can be "massaged" without creating any messy artifacts.
But, for many applications and some Photoshop plug-ins, 16 bits won't work, so it's not uncommon to have to convert over earlier on. It forces you to make a workflow decision sooner rather than later. But some things will do fine with 8 bit files. And Elements barely can do anything before you convert.