How do I proceed to make CiviCRM bilingual
Languages options allow you to limit the preferred language for your contacts. It's not related to multilingual setting.

To enable multilingual, you need to go to :


menu Administer -> Localization -> Language, Currency, Locations
go to the latest section "Multiple Languages Support", check the box "Enable Multiple Languages" (this will change the structure of your database so do a backup first) and Save
go to this page again, and you should see a "Add Language" with a dropdown list : choose one and Save


Now you should be in multilingual mode and should see the green/grey buttons where applicable.

Concerning "email greeting", i think you need to enable smarty in this context. Try to add in your civicrm_settings.php (see also https://wiki.civicrm.org/confluence/display/CRMDOC/Smarty+in+mail+templates) :

define( 'CIVICRM_MAIL_SMARTY', 1 );