Why are metal oxides generally more stable than their corresponding elemental forms? Why is the oxidation of certain metals such as iron favorable from a thermodynamic standpoint? What is it about these metal oxides that makes them inherently more thermodynamically stable than their starting, elemental forms? The only reason I can imagine is that iron, being a d-block element, has a low electronegativity and cannot stabilize valence electron density as well as oxygen, the second most electronegative element on the table. 

Also, is oxidation always thermodynamically favorable?
The oxidation of gold is not favorable.  For many other metals the metallic bonding is weaker than the bonding with oxygen.  

Let's look at the steps in oxidation:

Breaking metallic bonds (endothermic).

Ionizing the metal atoms (endothermic).

Electron affinity of oxygen (exo for the first, endo for the second).

Lattice energy of the oxide (exothermic).

The lattice energy is so high that the process is favorable.