Afterall God allows us to marry them which is MUCH closer then friendship.
closer than a friend but not necessarily closer than a wali.
moreover notice what allowed in related verse is marriage with women of people of the book not with christian jewish women. all christians and jews are people of the book but all people of the book aren't christians and jews. there are both believers and disbelievers of people of the book. for example you cant marry a trinitarian woman otherwise you would violate the verse prohibiting marriages with mushriks, and from other verses such as 6010 we know Allah doesnt approve marriages between believers and disbelievers.. so the rest depends how one interprets related verses.
You know it "awliya" means "allies"
No, it doesnt, as far as I know. As we turks are muslims for many centuries, there are many arabic words in turkish and wali (veli) is one of them. so
friend= arkadas
wali= veli (pl veliler or evliya)
ally= muttefik (probably another arabic origin word)
an allience (ittifak in turkish) is a kind of agreement based on common benefits generally but not on trust, whereas a veli is your helper, protecter, trusted friend, a kind of comrade maybe and is more than a friend/acquaintance.
as for verses 551 601,8,9 557, the verses 551 and 557 give the instruction
551 do not take christians and jews as awliyaa
557 do not take disbelievers of the people of the book as awliyaa
(notice the verses does NOT say "do not take people of the book as awliyaa", since there are also believers of the people of the book. )
and the verses 601,8,9 give the explanation why such an instruction is given by Allah.
it is something like
instruction I prohibit you from eating the apples on the table
explanation because I dont want you to eat rotten apples.
so apparently the conclusion is not that we are prohibited from eating rotten apples on the table, but we are prohibited from eating the apples on the table since they are ALL rotten.
Similarly Allah prohibits muslims from taking christians and jews (disbelievers of the people of the book) as awliyaa since they potentially fight muslims because of their religion and evict them from their homes, just because their belief in God.
This is in fact one of the basic messages of AQ and also given in other verses in different ways such as
2120 Neither the Jews, nor the Christians, will accept you, unless you follow their religion. Say, "GOD's guidance is the true guidance." If you acquiesce to their wishes, despite the knowledge you have received, you will find no ally or supporter to help you against GOD.
Now, keeping my words in mind go and read 5822. You will easily understand it.
peace