As a mage/cleric, I've been having a little fun using Spiritual Hammer. It's nice to rely only on your spells, and no outside equipment.

However, I've noticed something odd. When I hit a critter, an animation of funny blue lights swirls around it.

Sometimes when I hit a critter, I get told that it has 'Magic Resistance' (which implies that it resisted an effect). However, I still deal normal damage.

Does the Spiritual Hammer do anything apart from just normal, physical damage??? Why is a creature's magic resistance involved?

As I understand it, 'yes' there are two parts. It strikes (1.) as a normal war hammer, and then (2.) with a minor bonus damage attack of one point per six levels or fraction thereof up to three points.

Caster Level : Normal Damage + Magical Bonus

1st - 6th : 1d4+1 (normal) +1 (magic)
7th - 12th : 1d4+1 (normal) +2 (magic)
13th and above : 1d4+1 (normal) +3 (magic)

THAC0 bonus is in line with the magical damage bonus.