3 But yet so stern and terrible in sight
stern > fierce
4 That cheered his friends, and did his foes amate:
That > [That it] amate > daunt
5 He was an Elfin born of noble state,
state > {Condition or state in life}
6 And mickle worship in his native land;
mickle > much worship > honour, renown
7 Well could he tourney and in lists debate,
tourney > joust (esp. with blunt weapons when taking part in a tournament) lists > knightly contests ("lists" were the palisades enclosing the tilting-ground) debate > fight