I notice that this elder dragon will not attack me unless if I attack him back. He fly's around attacking hostile animals (he even took out a giant), but never touches me. Is it possible that you would encounter friendly dragons? Or is this a glitch?

I'm pretty sure it's only Paarthurnax and Odahviing that are friendly.Perhaps this dragon just doesn't seem to notice you, I have it happen to me all the time where a dragon will fly straight over my head but will attack something just down the road. Usually happens most just out-side Solitude, and once I reach Dragon's bridge it will attack me or the guards.

AFAIK, that sounds glitchy. I've had friendly bandits, necromancers and forsworn.

Some dragons arn't hostile to you exactly, it's more accurate to say that he is ignoring you rather than being your ally. This has happened to me before, and I have had elder dragons attack me before unprovocked (only dragons that actually still give me trouble in a fight.)

He just hasn't noticed you and saw all those big fat animals lumbering across the landscape, surely he would see them first instead of your skinny little self.

This. Even if I initiate fights with dragons (and damage them) they will often go after literally anything else in the area before coming after me.

If you ever get the Random Encounter: Dragon VS Dragon then one of those dragons will be friendly while the other is hostile. Normally the hostile one gets killed and you get an easy soul. This happened to me 7 times since 11/11/11 so it is rare.

Ive seen it once.