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I am currently reading through some utility patents on google. But I do not even see the words useful, novel, or no-obvious being mentioned in the patent.

In other words, who initiates the arguments for usefulness, novelty, and non-obviousness? Where are these arguments documented?

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No to the question in the title. The application presents and explains the invention and its features and operation.

The examiner makes a rejection on some grounds and the applicant brings forth data (for example in an affidavit from an expert) and makes arguments and possibly amendments to counter the specific rejection made by the examiner.

Those arguments may heavily depend on material from the specification and drawings as-filed but, current practice frowns on excessive characterization of the prior art other than to say there is a need for the present invention.

No general arguments as to why the invention is terrific and why prior art embodiments are horrible are helpful and they can be unhelpful.

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