However, this episode is a good example of why Picard should be saying "yeah, you all see the obvious arguments - but let's remember why the PD exists in the first place, so that you won't go play god the next time without again having this conversation and thinking it through". Saving people left and right has the effect of corrupting you into thinking you can do anything, and the negative consequences of that probably far outweigh the deaths of billions.
But the thing is, no one knows what the negative consequences will be. Basing all of your decisions solely on the possibility that there "may" be negative consequences is not a form of good judgement. After all, the Prime Directive is not some holy scripture written by the gods that is perfect and absolute. It was created by flawed beings, so it's reasonable to conclude that following the Prime Directive in the most absolute way possible will lead to flawed results.
But one element that never seems to be brought up is the possibility that their actions could yield positive circumstance. What if this species from Pen Pals was to becomes a valuable member of the Federation in the future? There always possibilities, so why resort to a lose/lose solution by falling back on just "We don't know what the consequences will be"?